forexsq - The yen sank to a six-month low on prospects Japanese elections next month will hand power to the opposition party that advocates more aggressive monetary easing.
Japanâ€™s currency was set for the biggest two-day drop in a year on speculation the election will favor Shinzo Abe, who today called for unlimited easing by the Bank of Japan. (8301) Demand for the euro was tempered before data forecast to show the currency blocâ€™s economy shrank a second quarter. The Dollar Index (DXY) was less than 0.1 percent from a two-month high as tensions in the Gaza Strip spurred demand for haven assets.
â€śThe yen is being sold against the dollar on speculation the elections will lead to a change in administrations and Abe will ask the BOJ for more easing,â€ť said Yuki Sakasai, a currency strategist at Barclays Plc in New York. forex