The dollar rose to a one-week high against the yen on Monday, climbing more than 2 percent, following Japanese Prime Minister Shinzo Abe's call for a fresh round of fiscal stimulus after a victory for his ruling coalition in local elections.
News that the stimulus could reach 10 trillion yen ($97.5 billion) helped Japan's stock market jump 4 percent and sent the dollar soaring against the Japanese currency. The Bank of Japan is expected to provide additional easing to keep interest rates low and the yen weak to make sure stimulus spending can gain traction.
"It now looks like there's coordinated fiscal and monetary policy," said Greg Anderson, global head of foreign exchange strategy at BMO Capital Markets in New York. "If you get a fiscal policy that is expansive ... the natural thing is to finance that with money-printing."