2017.10.2302:50:00UTC+00Dollar Strengthens to Multi-Month High Versus Yen on Abe Victory

The U.S. dollar hit a three-month high versus the Japanese yen on Monday, with an overwhelming election win for Prime Minister Shinzo Abe's ruling coalition party that opens the path for the further implementation of yen-weakening stimulus measures.

Abe's party managed to maintain two-thirds “super majority” in the parliament's lower house, the exit polls for the election held over the weekend showed, according to local media. The win by Abe eased worries that the economic measures adopted under his leadership would be unwinded and stop the yen's decline versus the dollar.

The greenback was 0.25 percent up at 113.79 yen, weakening a bit after hitting 114.10, its highest since July 11. The dollar index versus a basket of six major currencies advanced to 93.872, its highest level since October 6, before retreating to 93.767, 0.05 percent higher on the day.

Another focal factor for the U.S. currency was who U.S. President Donald Trump would name as the next Federal Reserve head. Investors are hoping that whoever the president nominates will continue incumbent Janet Yellen's dovish stance on monetary policy which has supported stock prices.

Meanwhile, the euro traded down 0.15 percent at $1.1768, continuing losses from last week's Friday session, when it fell by 0.6 percent.

The single currency has fallen from a two-and-a-half-year peak of $1.2092 hit on September 8, as hopes for the ECB to strike a more hawkish tone has been cooled by speculation that it is not hurrying to taper its easy policy. The ECB will hold its policy meeting on Thursday.

The New Zealand dollar, hit by the shift in the country's political landscape with a change in government, fell to a five-month trough of $0.6932 versus the greenback, last trading at $0.6964. The Australian dollar was flat at $0.7820.