Prospects for widening rate differentials between the U.S. and economies such as Japan and Europe helped the dollar this year and will continue to do so.
The trend will be a stronger yen through to the end of this month. Strong stocks are drawing flows of overseas money into Japanese assets.
The concern is that the protest will lead to violence, which will hinder the government's efforts to cut subsidies and the budget gap. That is weighing on the currency.
Investors increasingly fear that the US Fed will soon end its rate hike policy, which will keep the dollar in a weak tone against other major currencies.
It is highly likely that the 2 trillion yen buying in August reflected the market's expectations that Koizumi's victory will support the stock market, and that foreign buying could take a respite this month.
Some investors have piled up their euro holdings rapidly this week, overreacting to the Fed minutes. This long-euro position won't last.
The stronger economic outlook is positive for the stock market and may encourage more fund inflows to Asian countries such as South Korea and Taiwan. Such flows are supporting the currencies.
An increase in oil imports means more demand out of Japan for the dollar to buy them.
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