forexsq - The yen touched the lowest level in almost seven months as the Bank of Japan holds a two-day meeting amid speculation the opposition party that advocates more aggressive easing will take power in Decemberâ€™s election.
Japanâ€™s currency dropped against most major counterparts after Liberal Democratic Party leader Shinzo Abe was reported to have said heâ€™ll choose someone in favor of inflation targets as the next BOJ governor. Demand for the euro was limited before European finance ministers gather in Brussels tomorrow. Australiaâ€™s dollar climbed as gains in Asian shares boosted demand for higher-yielding assets.
â€śWhatâ€™s going on in Japanese politics is probably a more important driver for the yen, at least in the near term, and that can see it weakening,â€ť said Joseph Capurso, a currency strategist in Sydney at Commonwealth Bank of Australia. â€śIn the medium term, you can get these knee-jerk reactionsâ€ť to BOJ easing signals, he said.