- Japan's ruling coalition lost its parliamentary majority in Sunday's election for the first time since 2009, raising doubts over the Bank of Japan's ability to hike interest rates further and leading to a bearish weekly gap opening for the Japanese Yen.
- Public broadcaster NHK reported that Prime Minister Shigeru Ishiba's Liberal Democratic Party (LDP) and its coalition partner Komeito won 215 of 465 seats in the lower house, falling short of the 233 required for a majority and down from 279 held.
- Bets for smaller rate cuts by the Federal Reserve, along with concerns that spending plans of Vice President Kamala Harris and the Republican nominee Donald Trump will increase the deficit, lead to an extended sell-off in the US bond market.
- The yield on the benchmark 10-year US government bond stands firm near a three-month high touched last week, lifting the US Dollar closer to its highest level since July 30 and contributing to driving flows away from the lower-yielding JPY.
- In the latest geopolitical developments, Israel carried out precise strikes on military targets across Iran over the weekend in retaliation to the latter's barrage of ballistic missiles fired earlier this month and months of continuous attacks.
- Meanwhile, Iran indicated that it will not retaliate to Israeli strikes if a deal is reached for a ceasefire agreement in Gaza and Lebanon, easing fears of a further escalation of tensions in the Middle East and a broader conflict in the region.
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