Yen slumps to seven-month low
The yen hit a seven-month low against the dollar on Monday, hurt by expectations that a new Japanese government will push the Bank of Japan into taking aggressive monetary stimulus measures to boost economic growth.
The dollar rose to as high as 81.59 yen on trading platform EBS, its highest level since April 25, and last traded at 81.23 yen, down 0.2 percent from late U.S. trade on Friday. Investors have dumped the yen after the government set elections for Dec. 16 and the leader of the opposition Liberal Democratic Party (LDP), which is expected to win the poll, called on the Bank of Japan to print unlimited yen and set interest rates at zero or below to boost the economy.
Some market participants said the yen may find support after last week's 2.4 percent drop against the dollar, the Japanese currency's biggest weekly percentage drop in nine months. But, analysts said the medium-term outlook remained fragile.
We've travelled too far, too fast over the last week or so, said Gareth Berry, a strategist for UBS in Singapore.
In the short term, the yen might regain some ground against the dollar if the Bank of Japan refrains from announcing additional monetary easing on Tuesday, Berry said. The BOJ holds its policy meeting on Monday and Tuesday, but most analysts doubt whether any major changes will be unveiled.
Sources familiar with the central bank's thinking have said that the BOJ may push back any further monetary
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