The yen hit three-month lows against the dollar on Monday, as Japans ruling coalitions election loss raises political and monetary policy uncertainty , while the US dollar headed for its biggest monthly gain since April 2022.
The dollar rose by as much as 1 to a high of 153. 88, the yens weakest level JPYEBS since late July.
The yen, which recovered much of that loss, was last down about 0 .3 on the dollar at 152.72 , bringing the decline in October to 6.4, the largest of any G10 currency.
That recovery indicates to me that maybe the European and US markets, relative to Japanese traders, are not seeing the political uncertainty in the same light, said Jane Foley, head of FX strategy at Rabobank London.
What is also going to be very important for markets is whether or not there is a coalition in place relatively quickly so that there can be budget talks going into December.
