October 23, 2017 / 2:38 PM / a year ago

FOREX-Dollar hits three-month high vs yen after Abe party's win

    * U.S. tax plan, Fed chair nominee underpin dollar's rise
    * Euro pressured by Catalonia worries before ECB meeting
    * Speculators' net shorts on dollar fall to one-month low

 (Updates market action, changes dateline, previous LONDON)
    By Richard Leong
    NEW YORK, Oct 23 (Reuters) - The dollar touched a
three-month high against the yen on Monday, as investors bet the
overwhelming election victory for Japan's ruling party would
mean a continuation of "Abenomics," the ultra-loose policies
that have kept downward pressure on the yen. 
    The greenback was trading around its highest in 2-1/2 weeks
against a basket of six major currencies. Traders have
been speculating that the next head of the Federal Reserve could
take a more hawkish stance on monetary policy.
    Renewed expectations of federal tax cuts have also supported
 the greenback and stoked a rise in U.S. bond yields, with
two-year yields reaching a near nine-year peak.

    "The common trait is higher U.S. yields. You have the whole
Fed chair debate and the fiscal situation," said Alan Ruskin,
global co-head of FX strategy at Deutsche Bank in New York.
    U.S. President Donald Trump said in comments aired on Monday
that he would make his choice on the Fed chair "very shortly"
and was weighing at least three people: Federal Reserve Governor
Jerome Powell, Stanford University economist John Taylor and
current Fed Chair Janet Yellen.
    Speculators pared net bearish bets on the dollar to their
lowest level in more than a month, Commodity Futures Trading
Commission data showed on Friday.
    The dollar index was last up 0.15 percent at 93.839. 
    Japanese Prime Minister Shinzo Abe's ruling Liberal
Democratic Party (LDP)-led coalition kept its two-thirds "super
majority" in the lower house with a total of 313 seats in its
election win on Sunday.
    Abe's victory eased fears that the economic steps
implemented under his leadership, including an expansive
asset-purchase program by the Bank of Japan, would be disrupted
and halt the yen's depreciation against the dollar.    
    The dollar gained as much as half a percent to 114.10 yen
 on the EBS trading platform, its strongest since July
11. It was last up 0.1 percent at 113.69 yen.
    The euro fell 0.3 percent at $1.1751, holding
below a 2-1/2-year peak of $1.2092 reached on Sept. 8, on
anxiety about Madrid's handling of civil unrest in Catalonia
following a referendum on the region's independence on Oct. 1.

    The single currency was on its back foot ahead of a European
Central Bank policy meeting on Thursday. Traders were betting on
a more hawkish stance from the ECB offset by hints it is not in
a rush to tighten policy.
    Currency bid prices at 10:17AM (1417 GMT)
 Description      RIC         Last           U.S. Close  Pct Change     YTD Pct     High Bid    Low Bid
                                              Previous                   Change                 
 Euro/Dollar      EUR=        $1.1752        $1.1785     -0.28%         +11.79%     +1.1777     +1.1734
 Dollar/Yen       JPY=        113.6800       113.5000    +0.16%         -2.73%      +114.0900   +113.6200
 Euro/Yen         EURJPY=     133.61         133.71      -0.07%         +8.50%      +134.1200   +133.5000
 Dollar/Swiss     CHF=        0.9855         0.9841      +0.14%         -3.17%      +0.9881     +0.9832
 Sterling/Dollar  GBP=        1.3197         1.3187      +0.08%         +6.98%      +1.3226     +1.3159
 Dollar/Canadian  CAD=        1.2639         1.2624      +0.12%         -5.89%      +1.2648     +1.2613
 Australian/Doll  AUD=        0.7809         0.7818      -0.12%         +8.23%      +0.7834     +0.7802
 Euro/Swiss       EURCHF=     1.1585         1.1596      -0.09%         +8.10%      +1.1602     +1.1572
 Euro/Sterling    EURGBP=     0.8904         0.8932      -0.31%         +4.53%      +0.8944     +0.8900
 NZ               NZD=        0.6968         0.6963      +0.07%         +0.39%      +0.6989     +0.6933
 Dollar/Norway    NOK=        7.9893         7.9823      +0.09%         -7.50%      +8.0042     +7.9775
 Euro/Norway      EURNOK=     9.3894         9.4083      -0.20%         +3.34%      +9.4096     +9.3798
 Dollar/Sweden    SEK=        8.1911         8.1615      +0.06%         -10.06%     +8.2235     +8.1679
 Euro/Sweden      EURSEK=     9.6273         9.6211      +0.06%         +0.49%      +9.6530     +9.6131
All spots FX= 
Tokyo spots AFX= 
Europe spots EFX= 
Volatilities FXVOL= 
Tokyo Forex market info from BOJ TKYFX World central bank news
Economic Forecasts... ECON   Official rates...INT/RATE
Forex Diary.......MI/DIARY   Top events........M/DIARY
Diaries...........DIARY Diaries Index........IND/DIARY
Press Digests.....PRESS Polls on G7 economies..SURVEY/
European markets......MARKETS/))


 (Additional reporting by Jemima Kelly and Polina Ivanova in
London; Shinichi Saoshiro in Tokyo; Editing by Catherine Evans
and Meredith Mazzilli)
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