The yen rose against its major peers after Japan’s ruling party failed to win an independent majority in elections to the upper house and traders speculated on Prime Minister Shinzo Abe’s ability to push through reforms.
The Japanese currency gained against the dollar as the first bicameral majority for the ruling coalition in six years sets up a potential internal government battle as Abe seeks to revamp economic to defense policies. The greenback held a weekly decline against the euro as Pacific Investment Management Co.’s Bill Gross said he expects the Federal Reserve won’t tighten policy before 2016. The Australian dollar climbed after Fed Chairman Ben S. Bernanke last week said it’s “too early” to decide on the timing for tapering bond purchases.
“People had expected that if he’d achieved a single-party majority he could have placed more pressure on the Bank of Japan to ease policy further, and that would have been a yen negative,” Hamish Pepper, a currency strategist at Barclays Plc in Singapore, said in a Bloomberg Television interview, referring to Abe. “That’s what we’re seeing now in the moves in dollar-yen.”