Without much economic and political news right now, Japan's equity strength is the main driving force, of course, in the yen's favor.

The markets care about comments by Japanese high-ranking officials, especially after the G-7 meeting. Such statements will weigh on the yen.

Overseas investors are selling their Nikkei stocks. This is yen negative for sure. Sliding share prices will continue to weigh on the yen.

The evidence supports the view that economic fundamentals have steadied in the U.S. and the dollar may bounce back from its slump. Given the prospects the Fed may raise rates two more times at least, the dollar is more likely to rise than fall from the 115 yen level.

Expectations foreign investors will keep putting more money into Japanese equities are supporting the yen. Growing support for Koizumi is also positive for the yen because he is considered a reformer. A victory means a stable administration, which will make it easier to promote reform.

Fed officials are sounding hawkish. They're signaling further rate hikes and that's making investors feel safer buying the dollar.