The yen dropped for a second day before weekend elections forecast to renew Japanese Prime Minister Shinzo Abe’s mandate for economic policies that have weighed on the currency.
The yen fell against 12 of its 16 major counterparts as a recovery in global stock markets reduced demand for haven assets. Norway’s krone slid for a third day as tumbling crude oil prices prompted the central bank to unexpectedly cut interest rates yesterday. The New Zealand dollar dropped for the first time in four days as an industry report showed manufacturing growth slowed last month. The U.S. currency rose against most of its major peers amid speculation the Federal Reserve is moving closer to raising borrowing costs.
“The ruling coalition looks like it will preserve its two-thirds majority, an election result that will support Abenomics,” said Kazuo Shirai, a trader at MUFG Union Bank NA in Los Angeles, referring to Abe’s economic plan. “I wouldn’t be surprised to see the yen weaken to about 122 per dollar.”