Some traders and investors remain concerned those losses could resume as the new government faces the challenge of restructuring the banking industry and the economy.
"The prospect of getting reforms pushed through isn't as high as popular sentiment has it now" and the yen is likely to slip on any disappointments, said Robert Lynch, a currency strategist at BNP Paribas. Even if new policies are implemented without delay, "there will be economic pain to go through which will result in a weaker yen" before growth in Japan can recover, he said.
Lynch said the yen may rise as far as 118 per dollar in coming days, before its gains are capped by signs of slow growth.
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