The dollar gained ground against the yen on Monday, reflecting investor focus on political changes in Japan and the euro area, amid ongoing U.S. credit concerns. The yen weakened as Sanae Takaichi seems set to become Japan's first female prime minister, raising fears of fiscal policy shifts.

Anticipation of fiscal expansion under Takaichi, coupled with her alliance with the Japan Innovation Party, has sparked investor wariness about the yen's future. Analysts like MUFG's Lee Hardman advise watching the new government's policy plans closely.

In contrast, the euro showed slight strength against the dollar as French political pressures decreased, although skepticism remains. The euro's resilience is doubted amid French pension reform freezes, as U.S. markets display modest confidence despit

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