Yen Plummets as Japan Faces Political Shake-Up

The Japanese yen hit a three-month low following Japan's election results, leaving the ruling coalition without a majority and creating political uncertainty. This impacted the yen's value against the dollar, euro, and sterling, amid upcoming U.S. economic data releases that could affect Federal Reserve policy decisions.

The yen was under pressure, reaching near a three-month low after Japan's ruling coalition lost its parliamentary majority in elections, raising political and monetary policy uncertainties.

Japan's Finance Minister, Katsunobu Kato, emphasized vigilance on foreign exchange moves, while challenges loom as a coalition forms following the election. This hints at risks of looser fiscal policies.

As the yen struggled, eyes turned to the upcoming U.S. economic data, with the Federal Reserve's policy path in focus, potentially influencing the yen further. Meanwhile, a strengthening dollar, buoyed by U.S. economic resilience, performed well, adding pressure on the yen.

(With inputs from agencies.)