The yen slumped today, halting a four-day rally, as a landslide victory for Japan’s ruling coalition in weekend elections boosted hopes for a government stimulus package.
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“Expectations for the FOMC lifted yesterday by up seven basis points but a 0.25 percent rate hike is not fully priced until mid-2018”, Commonwealth Bank of Australia worldwide economist and currency strategist Joseph Capurso said. There were also gains of about 0.3 percent for Seoul, Wellington and Singapore.
Japan’s Prime Minister Shinzo Abe, who is also leader of the ruling Liberal Democratic Party (LDP), reacts during a news conference at the LDP headquarters in Tokyo on Sunday.
“I am honestly so relieved”, he said, promising new government spending to help move the economy out of the doldrums in a “total and aggressive” way. While he has released few details, investors are betting he’ll keep flooding the markets with money by expanding bond purchases using newly printed money in a program known as quantitative easing. But some investors think the worst is over as oil prices stabilize, the jobs market strengthens and consumers start spending more. Alcoa is traditionally the first major USA company to report earnings.
Mitsubishi Heavy Industries gained 10.80 yen, or 2.5 percent, to 441.80 yen after the heavy machinery manufacturer’s subsidiary said Monday it has won an order to deliver up to 20 units of the Mitsubishi Regional Jet passenger aircraft to Rockton AB, a regional aircraft leasing company in Sweden. Eastern time. The Dow Jones industrial average was up 110 points, or 0.6 percent, to 18,257.
As might have been expected after such news, Japan’s Nikkei index jumped by almost 4% while the yen took the opposite route by falling precipitously against the United States dollar, euro, and British pound, among other key rivals. The contract fell 65 cents, or 1.4 percent, to close at $44.76 a barrel on Monday. Brent crude, a standard for Global oil prices, rose 73 cents to $46.98 a barrel in London.
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The currency is weaker by 1.9% at 102.46 per dollar as of 7:23 a.m. ET. The dollar dropped to 0.9825 Swiss francs from 0.9834 Swiss francs, and it climbed to 1.3120 Canadian dollars from 1.3047 Canadian dollars. We want to hear from you. He has spoken often of the need to ditch the nation’s American-drafted laws with domestically written ones and that opportunity presents itself after Sunday’s overwhelming victory in upper house polls.
