Analysts See More Volatility in Yen, Stocks After Japan Election

The yen may be volatile against the dollar as a setback for Prime Minister Shigeru Ishiba’s ruling coalition in the upper house election casts doubt over the nation’s policy direction, dimming the appeal of Japanese assets, strategists say.

Ishiba said he intended to stay on even as his party looks likely to govern the country without a majority in at least one of the legislative chambers for the first time since 1955.

Japan’s currency gained as much as 0.7% to 147.79 per dollar before paring the move to 148.38 as of 9:40 a.m. in Tokyo.

Japanese stock futures in a narrow range as investors digested the historic defeat for the Liberal Democratic Party. Cash equity trading in Tokyo is shut Monday for a national holiday.

Here’s what strategists are saying:

Akira Moroga , chief market strategist at Aozora Bank

Nick Twidale , chief analyst at ATFX Global Markets

Rodrigo Catril , a currency strategist at National Australia Bank

Kristina Clifton , senior economist and currency strategist at Commonwealth Bank of Australia

Steven Englander , head of G10 FX research at Standard Chartered Bank

Hebe Chen , an analyst at Vantage Markets in Sydney

Tim Waterer , chief market analyst at KCM Trade