USD/JPY reached a three month high as Japan’s ruling party’s won the elections

The dollar expanded its gains on Monday to reach a three month high versus the yen following the big victory of Japanese Prime Minister Shinzo Abe’s ruling party on Sunday’s election.

As local media stated, Abe’s LDP (Liberal Democratic Party) -led coalition maintained its two thirds “super majority” in the lower house.

His victory lifted fears regarding the disturbance of his economic policies, which are reported to aim at weakening the yen versus the dollar.

The dollar is currently on a bullish momentum on account of the likelihood of U.S. tax reforms which gained support in the Senate. The greenback went up by 0.3 percent closing at 113.860 JPY after already reaching 113.945 – the highest since July 12.

Wall Street closed deep in the green zone

The prospects of a tax reform gave the U.S. stock market significant boost. The Dow Jones climbed by 165.59 points on Friday reaching a record of 23,328.63. The S&P 500 climbed by 0.5 percent towards 2,575.21. The NASDAQ added 0.4 percent to its value closing at 6,629.05 points.

American Stock investors are waiting for the new Federal Reserve chair

Investors are waiting for the nomination of the incoming Federal Reserve chair hoping that the person who will be nominated will follow the same monetary policy that has reinforced increasing stock prices for the past nine years.

The Federal Reserve is led by Janet Yellen since 2014. She began slowly raising interest rates in the late 2015 from the low levels seen after the 2008 financial crisis.

Tightening monetary policy may be viewed as placing economic growth at risk, including a long stock market rally and corporate earnings. U.S. president Trump has commended the record highs in U.S. stock prices, possibly making it less likely that he would choose someone who would diverge significantly from the current Fed policy.

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