Yen Slumps as Japan Faces Political Uncertainty Amid U.S. Rate Cut Speculations

The yen experienced a significant fall on Monday after Japanese Prime Minister Shigeru Ishiba announced his resignation, introducing a wave of uncertainty to the economic landscape of the world's fourth-largest economy. As the yen weakened against major currencies, the market shifted its gaze to Ishiba's potential successors, especially those advocating for more relaxed fiscal policies.

The impact of Ishiba's resignation reverberated through various financial markets. Investors are wary, as the government's instability might prompt a lenient fiscal stance. Analysts, such as Hirofumi Suzuki from SMBC, note the potential for heightened volatility in the coming months.

Internationally, the dollar reclaimed some losses amid anticipation of a Federal Reserve rate cut following weak U.S. job data. Currency fluctuations persisted across global markets, reflecting the ongoing reshuffle and speculation in Japan and the U.S. alike.

(With inputs from agencies.)