Yen remains under pressure after Japan election
Dollar/yen hits 153.88
Dollar index eyes largest monthly rise since 2022
Analysts predict further yen weakness, potential BoJ caution
Updates to U.S. afternoon
By Laura Matthews
NEW YORK, Oct 28 (Reuters) -The yen hit three-month lows against the dollar onMonday, remaining under pressure as an election loss by Japan's ruling coalition raises political and monetary policy uncertainty, while the U.S. dollar headed for its biggest monthly gain since April 2022.
The dollar rose by as much as 1% to a high of153.88, the yen's weakest levelJPY=EBS since lateJuly. The yen was last down about 0.7%on the dollar at 153.34, bringing the decline in October to6.4%, the largest of any G10 currency.
"The yen has been the most volatile major currency this year, and a surprise election result has added to this uncertainty around monetary policy and fiscal policy going forward," said Adam Button, chief currency analyst, ForexLive, Toronto.
"Once again, the reaction is to sell a bit of the yen. It is fresh in the mind of investors how the LDP leadership election caused the volatility to quickly unwound. So, it's a difficult one to take a side on."
A period of wrangling to secure a coalition is likely after Japan's Liberal Democratic Party and its junior partner Komeito won 215 lower house seats to fall short of the 233 majority.
Traders said the vote would likely result in a government without the political capital to preside over rising rates and could usher in another era of revolving-door leadership.
Shigeru Ishiba was Japan's fourth prime minister in a little over four years, and further instability was widely expected to breed caution at the central bank, which meets to set rates this week.
Analysts at BNY said the next immediate target for dollar/yen would be 155 with 160 a likely line in the sand that would draw intervention from the finance ministry.
DOLLAR GAINS
Elsewhere, the dollar headedfor its largest monthly rise in two and a half years against a basket of major currencies, driven bysigns of strength in the U.S. economy. Bets on Donald Trump winning the presidency have alsolifted U.S. yields in anticipation of policies that could delay interest rate cuts.
The U.S. dollar index =USD has climbed 3.6% to 104.46 during October, its sharpest monthly rise since April 2022. It eased down 0.07% to 104.31.
Most analysts argued that markets are increasingly pricing in a Republican sweep, with Trump winning the presidency and his party controlling both chambers of Congress.
The euro, meanwhileEUR=EBS, rose 0.15% to $1.0813, but was still down nearly3% onthe month.
Analysts said the single currency could drop further if the U.S. enacts a global baseline tariff, in addition to higher duties on China, and other countries retaliate. Much of the move would come from higher U.S. policy rates in response to the inflationary impact of tariffs.
Traders are also upping their bets that the European Central Bank could cut rates more aggressively, which is also weighing on the euro.
Investors are now focusing on the U.S. October employmentreport this week, which is likely to be affected by a strike at Boeing and two hurricanes that hit the U.S. Southeast.
The week ahead also includes inflationreadings for Europe and Australia, gross domestic product data in the U.S. and purchasing managers' indexes for China.
"The market will be looking quite closely for more signs into what's happening in December. (It's) going to be listening to what the reaction is to the stronger non-farm payrolls numbers. It comes down to the Fed's reaction function," said Peter Vassallo, FX portfolio manager at BNP Paribas Asset Management in Boston.
He cautioned that with one week to go before the U.S. election, a calm day like Monday may not be the norm, as "some uncorrelated and wild moves is also possible" if economic data surprises this week and the lack of liquidity exaggerates market moves.
World FX rates https://tmsnrt.rs/2RBWI5E
Reporting by Laura Matthews in New York; additional reporting by Tom Westbrook and Stefano Rebaudo; Editing by Sharon Singleton and Nick Zieminski
Ativos relacionados
Últimas notícias
Isenção de Responsabilidade: As entidades do XM Group proporcionam serviço de apenas-execução e acesso à nossa plataforma online de negociação, permitindo a visualização e/ou uso do conteúdo disponível no website ou através deste, o que não se destina a alterar ou a expandir o supracitado. Tal acesso e uso estão sempre sujeitos a: (i) Termos e Condições; (ii) Avisos de Risco; e (iii) Termos de Responsabilidade. Este, é desta forma, fornecido como informação generalizada. Particularmente, por favor esteja ciente que os conteúdos da nossa plataforma online de negociação não constituem solicitação ou oferta para iniciar qualquer transação nos mercados financeiros. Negociar em qualquer mercado financeiro envolve um nível de risco significativo de perda do capital.
Todo o material publicado na nossa plataforma de negociação online tem apenas objetivos educacionais/informativos e não contém — e não deve ser considerado conter — conselhos e recomendações financeiras, de negociação ou fiscalidade de investimentos, registo de preços de negociação, oferta e solicitação de transação em qualquer instrumento financeiro ou promoção financeira não solicitada direcionadas a si.
Qual conteúdo obtido por uma terceira parte, assim como o conteúdo preparado pela XM, tais como, opiniões, pesquisa, análises, preços, outra informação ou links para websites de terceiras partes contidos neste website são prestados "no estado em que se encontram", como um comentário de mercado generalizado e não constitui conselho de investimento. Na medida em que qualquer conteúdo é construído como pesquisa de investimento, deve considerar e aceitar que este não tem como objetivo e nem foi preparado de acordo com os requisitos legais concebidos para promover a independência da pesquisa de investimento, desta forma, deve ser considerado material de marketing sob as leis e regulações relevantes. Por favor, certifique-se que leu e compreendeu a nossa Notificação sobre Pesquisa de Investimento não-independente e o Aviso de Risco, relativos à informação supracitada, os quais podem ser acedidos aqui.
