The yen fell across the board on Thursday, hitting a seven-week low against the euro, as traders bet Japan's upper house elections on Sunday would strengthen Prime Minister Shinzo Abe's position and his stimulus plans.
Opinion polls show Abe's ruling bloc on track for a big win, which will give Abe more freedom to push forward his agenda to revive the economy through aggressive monetary easing and hefty government spending.
(Read more: Fate of yen hinges on Japan's weekend elections)
The monetary easing would lower bond yields and spur Japanese investors to buy higher-yielding overseas assets by selling the yen.
The dollar and euro have gained about 15 percent against the yen so far this year on expectations of aggressive easing in Japan. But the rally has lost momentum since the dollar hit a 4 1/2-year high of 103.73 yen in late May.
"Japanese elections over the weekend should encourage more outflows out of Japan," said Sebastien Galy, foreign exchange strategist at Societe Generale in New York.