Dollar hits 3-month high versus yen

The greenback had already gained about 0.9 per cent against the Japanese currency on Friday, after the US Senate approved a budget blueprint for the 2018 fiscal year.

london - Investors bet that Abe's election victory will see a continuation of the ultra-loose 'Abenomics' policy

Published: Mon 23 Oct 2017, 4:51 PM

Last updated: Mon 23 Oct 2017, 6:55 PM

The dollar touched a three-month high against the yen on Monday, with investors betting that an emphatic election victory for Japan's ruling party would see a continuation of the ultra-loose "Abenomics" policy that has kept downward pressure on the yen.

Japanese Prime Minister Shinzo Abe's victory eased fears that the economic steps implemented under his leadership, including an expansive asset-purchase programme by the Bank of Japan, would be disrupted and would halt the yen's depreciation against the dollar.

The dollar gained as much as half a per cent to reach 114.10 yen after the results, its strongest since July 11. It came off those highs in early dealing in London but was still up 0.3 per cent on the day.

"The relatively muted rise in dollar/yen following Abe's election win is consistent with the fact that this was very much the most expected result," said BNP Paribas currency strategist Sam Lynton-Brown.

"The outcome should be consistent with the market continuing to price static and dovish policy from the BoJ, even in the context of [BoJ governor Haruhiko] Kuroda's term coming to an end in April of next year." - Reuters

Published: Mon 23 Oct 2017, 4:51 PM

Last updated: Mon 23 Oct 2017, 6:55 PM