Japan ruling party's election loss is in the price, investors say
The nation's ruling coalition lost control of the upper house, further weakening Prime Minister Shigeru Ishiba's grip on power as he vowed to remain party leader, citing a looming tariff deadline with the US.
Japanese markets were closed on Monday for a holiday, but the rise in the yen and Nikkei futures showed investors had priced in the election outcome. The Japanese currency has weakened considerably this year on expectations of changes to taxes and a bigger fiscal deficit.
The election result, while not entirely a shock to markets, also comes at a tricky time for a country trying to get a tariff deal with US President Donald Trump before an August 1 deadline.
Japanese government bonds plunged last week, sending yields on 30-year debt to an all-time high, while the yen slid to multi-month lows against the US dollar and the euro.
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