×

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 -CFTC

(Updates market action, changes dateline, previous LONDON) 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

Session

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

ar

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/Dollar

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 CEN

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)