The New Zealand dollar rose to a four-year high against the yen after Japan's Liberal Democratic party swept to power, mustering enough support to enact sweeping economic reforms and weaken the currency.
The kiwi dollar jumped to 71.33 yen, the highest since September 2008, from 70.57 yen in New York on Friday. The kiwi traded at 84.54 US cents from 84.56 cents on Friday, holding near the highest since September last year.
The LDP and junior partner New Komeito won at least 320 of the 480 seats in the lower house in Sunday's election, a two-third majority, Nikkei reported. That gives it enough power to pass laws even in the face of opposition in the upper house. The kiwi dollar has advanced ahead of data this week that's expected to show the economy continued to grow in the third quarter while the current account deficit shrank.
"With the LDP party gaining an outright majority in the weekend's Japanese elections, further NZD/JPY gains appear to be in store," said Mike Jones, strategist at Bank of New Zealand.
The next test for the yen will be the Bank of Japan's policy decision on Thursday, and "Friday's lacklustre Tankan data has all but cemented further easing," Jones said.