After election, Japanese yen ends four-day slide vs. dollar

The yen rose for the first time in four days against the dollar yesterday after Japan’s ruling party failed to win an independent majority in upper-house elections as Prime Minister Shinzo Abe seeks to revamp economic policy.

The dollar weakened versus all except one of its 16 major counterparts after Pacific Investment Management’s Bill Gross said he expects the Federal Reserve won’t tighten policy before 2016.

Australia’s dollar climbed after officials in China moved to scrap a rule that had constrained bank lending.

“There’s a knee-jerk reaction in the yen because some people had hoped the ruling party would win a majority,” said Lee Hardman, a currency strategist at Bank of Tokyo-Mitsubishi UFJ in London.

“The key going forward will be the policies announced and implemented by the government. If the government is true to its word, and implements the reforms, then that will remain a yen negative.”

Bloomberg