Currency Turmoil: Yen Dips Amid Political Shifts

The Japanese yen experienced a significant drop on Monday following the resignation of Prime Minister Shigeru Ishiba, thrusting Japan into a period of potential political uncertainty. The yen's decline was mirrored in its exchange rates with the euro and sterling, raising concerns among investors about future economic strategies.

With Ishiba stepping down, market focus has turned to potential successors who may advocate for looser fiscal policies, such as LDP's Sanae Takaichi. Former Foreign Minister Toshimitsu Motegi's candidacy marked the beginning of the political stir, while Japan's economic pulse stayed steady, bolstered by unexpected GDP growth data. Meanwhile, Japanese stocks rose, although government bonds held steady amid the turbulence.

Globally, the dollar struggled following discouraging U.S. jobs data, suggesting the likelihood of an imminent Federal Reserve rate cut. This development further influenced currency trends, with sterling and the euro showing minor fluctuations. As the financial landscape shifts, attention remains fixed on evolving economic and policy decisions on the international stage.

(With inputs from agencies.)