Yen Surges as Ishiba’s Party Crashes in Election Shock—Traders Cheer Political Chaos

Tokyo markets wake up to a currency rollercoaster as Japan's yen defies gravity post-election upset.

Political wrecking ball swings

The ruling faction's collapse sent shockwaves through currency markets—because nothing fuels financial stability like a good old-fashioned power vacuum. Hedge funds piled into yen positions faster than politicians empty campaign coffers.

Structural irony alert

While mainstream analysts hyperventilate about 'uncertainty,' crypto traders recognize the playbook: weak fiat regimes historically bleed into digital asset inflows. Another brick in the wall for Bitcoin's 'chaos hedge' narrative.

Bonus jab: Traditional finance clings to its beloved yen like a security blanket—never mind that Japan's debt-to-GDP ratio makes crypto leverage look responsible.

China leaves lending rates unchanged as yuan stays flat

Over in China, the People’s Bank of China decided Monday to hold both its 1-year and 5-year loan prime rates steady, adding to the cautious tone across regional markets. The offshore yuan barely moved. By 9:50 a.m. local time (9:50 p.m. ET Sunday), it nudged up just 0.02%, landing at 7.1788 per dollar. The message from Beijing was clear: no rate cuts, no stimulus surprises, at least for now.

Stocks in Hong Kong and mainland China started Monday on the front foot. The Hang Seng Index was up 0.55% and the CSI 300 rose 0.28% as of 9:42 a.m. local time (9:42 p.m. ET Tuesday). That bounce came right after the central bank’s move to keep its main borrowing rates unchanged. But the Optimism was cautious, as most investors remained focused on external threats, especially trade.

In Washington, Commerce Secretary Howard Lutnick warned Sunday that August 1 would be the “hard deadline” for countries to start paying tariffs. He added, “Nothing stops countries from talking to us after August 1,” suggesting negotiations can continue, just not without cost. The U.S. position has once again rattled Asia’s exporters, with currency and stock traders trying to gauge how far this pressure will go.

Singapore’s dollar weakens while stocks keep running

Singapore’s currency is getting squeezed. The Singapore dollar, already under strain as the U.S. dollar rallies, came under more pressure Monday. The WHITE House’s latest threat of new tariffs, especially on pharmaceuticals and semiconductors, hit hard.

Those two sectors are among Singapore’s top exports. And with trade risks rising, analysts at Barclays Plc and Asia Decoded Pte. are now saying the Monetary Authority of Singapore could ease its exchange-rate policy as early as this month.

The speculation over policy easing comes as Singapore tries to shield its economy from external shocks. The stronger dollar and tariff threats are stacking up fast. Still, despite the pressure, the city-state’s Straits Times Index is on a roll.

On Monday, the benchmark climbed for an 11th straight session, hitting a new high of 4,225.79 before pulling back slightly to 4,215.22 by 10:10 a.m. local time (10:10 p.m. ET). The biggest gains came from the utilities, financials, and real estate sectors. Top movers included Mapletree Logistics Trust, which ROSE 1.69%, Yangzijiang Shipbuilding, which gained 1.67%, and Keppel, which added 1.36%.a

India’s markets didn’t share the same momentum. The Nifty 50 Sensex index fell 0.26% by 9:30 a.m. IST (12 a.m. ET), showing how mixed sentiment still is across the region.

Crypto saw a modest surge too. After a wild week, Bitcoin ticked up 0.21%, landing at $118,368.56 by 12:16 p.m. Singapore time (12:15 a.m. ET). The gains weren’t explosive, but they were enough to keep bullish traders engaged.

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