Yen falls to three-month low as Japan's ruling coalition loses majority

The yen fell to a three-month low on Monday after Japan's ruling coalition lost its parliamentary majority, which may slow future interest rate hikes. The dollar rose due to higher U.S. yields. Prime Minister Shigeru Ishiba's coalition secured 209 out of 465 lower house seats, down from 279. This marks the coalition's worst performance since 2009, leading to expectations of slower policy normalization from the Bank of Japan. In other currency markets, the U.S. dollar index rose 3.6% in October, its largest monthly gain since April 2022. The euro and sterling also declined against the dollar, while the Australian and New Zealand dollars fell due to weak economic signals from China.