Yen Rebounds After Japan Election Setback; Asian Stocks Slip – Asia Market Wrap

The yen recouped some of last week’s losses as investors weighed the extent of the defeat suffered by Japan’s ruling coalition in the weekend’s upper-house election. Asian shares dropped for the first time in three days.

Japan’s currency strengthened as much as 0.7% against the dollar, before paring gains. The yen had dropped for two weeks and bond yields spiked ahead of the vote on concern a poor showing by Prime Minister Shigeru Ishiba would open the door to more spending and tax cuts. While the ruling Liberal Democratic Party and its partner lost their majority in the chamber, their final tally may be enough to keep Ishiba in the job.

Elsewhere, shares in Hong Kong edged up while the regional MSCI Asia Pacific Index declined 0.1%. US equity-index futures edged up 0.1%. Oil held its decline while a gauge of the dollar was flat.

Meanwhile, US President Donald Trump pushed back on a report that Treasury Secretary Scott Bessent advised that markets would react badly if he fired Federal Reserve Chair Jerome Powell.