Yen Falls Amid Japan Political Jitters

(RTTNews) - The Japanese yen weakened against other major currencies in the Asian session on Monday, amid renewed concerns about Japan's fiscal crisis.

According to media reports, the Japan Innovation Party (JIP) and the country's ruling Liberal Democratic Party (LDP) have decided to establish a coalition administration.

Sanae Takaichi may became Japan's first female prime minister as a result of this, and it also stoked rumors of excessive expenditure and loose monetary policy, which led to some intraday selling around the JPY.

To enact any legislation, the shaky new coalition—which is still a minority—would require the support of other opposition parties.

Furthermore, the BoJ may be able to keep things as they are at this month's meeting due to uncertainty surrounding global trade.

On Friday, however, BoJ Deputy Governor Shinichi Uchida stated that if pricing and economic developments align with its projections, the central bank will keep hiking interest rates.

Asian stock markets are trading mostly higher, as traders remain optimistic on easing trade tensions between the U.S. and China after U.S. President Donald Trump said the high tariffs; he has threatened on Chinese imports are probably not sustainable but argued "they forced me to do that."

Trump confirmed he would meet with Chinese President Xi Jinping at a summit in South Korea later this month after previously casting doubt on whether the planned meeting would be worthwhile.

Reports emerged earlier that the U.S. may impose up to 500 percent tariffs on China over rare earth limits and Russian oil, risking global trade turmoil.

In the Asian trading today, the yen fell to nearly a 2-week low of 190.54 against the Swiss franc, from Friday's closing value of 189.95. The yen may test support near the 192.00 region.

Against the euro, the pound and the U.S. dollar, the yen dropped to 4-day lows of 176.37, 203.11 and 151.20 from last week's closing quotes of 175.52, 202.24 and 150.64, respectively. If the yen extends its downtrend, it is likely to find support around 178.00 against the euro, 205.00 against the pound and 153.00 against the greenback.

Looking ahead, Eurozone construction output for August is due to be released in the European session.

In the New York session, Canada PPI and raw material prices for September, U.S. Consumer Board's leading index for September, are slated for release.