The dollar experienced a modest increase against the yen on Monday, as investors focused on Japan's political shifts and ongoing U.S. credit concerns. The yen weakened in anticipation of Sanae Takaichi's potential premiership, representing a coalition that may introduce fiscal expansions, causing market apprehensions.

MUFG's senior currency economist, Lee Hardman, noted that market participants are keenly observing the new coalition government's fiscal strategies. Meanwhile, Bank of Japan board member Hajime Takata advocated for resuming interest rate hikes, offering some support to the yen.

In the U.S., stock indices rose as President Trump's remarks on tariffs eased some credit risk concerns. Yet, the economic landscape remains fraught with challenges, including the government shutdown

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