Japan’s yen weakens to one-week low after new prime-minister election

The Japanese yen slid more than 0.7% against the dollar on Tuesday after hard-line conservative Sanae Takaichi was elected as Japan’s prime minister. Markets interpreted her fiscal-expansion leaning as increasing the pressure on the Bank of Japan to maintain ultra-loose monetary policy for longer. The dollar index climbed to a six-day high, while the euro recouped some losses. The shift adds to global currency volatility at a time when central-bank divergence is increasingly priced in.