Yen hovers near 7-month low vs US dollar
Shinzo Abe, the leader of the LDP, has called on the BOJ for bolder policy action, including unlimited easing, pushing interest rates to zero or below zero and directly underwriting bonds issued to fund public works spending.
In the latest sign of the LDP's stance on monetary policy, the Nikkei newspaper reported that the party is likely to include in its campaign platform a pledge to consider revising a law guaranteeing central bank independence.
While there is the possibility of the LDP toning down its rhetoric after the election, such calls for forceful BOJ easing are likely to persist for now and support the dollar against the yen, said Rob Ryan, a strategist at RBS.
I don't see a reversal right now, Ryan said, adding that the dollar will probably head into the election a bit higher than where it stands now.
The euro dipped 0.2 percent to $1.2795, having eased after Moody's cut France's sovereign rating by one notch to Aa1 from Aaa, citing an uncertain fiscal outlook and deteriorating economy.
The single currency's losses were limited, however, with analysts saying the downgrade did not come as a surprise.
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