By Willa Plank, James Glynn and Hiroyuki Kachi
Asian stock markets, the dollar and U.S. stock futures jumped in early Asia trading and stock markets opened higher after Federal Bureau of Investigation Director James Comey said a review of new evidence gave it no reason to change its earlier decision that U.S. presidential candidate Hillary Clinton shouldn't face charges related to her use of a private email server.
The dollar rose to 104.10 against the yen following the news, up from 103.37 earlier, partially reversing its weakness against the Japanese currency over the last week following Mr. Comey's earlier letter late last month to Congress saying it had uncovered new evidence it believed was related to the email server.
The euro was down sharply against the dollar and was trading at $1.1087, down from $1.1115 just before the FBI comments. The Mexican peso, which has been highly sensitive to developments in the U.S. presidential race, headed in the opposite direction, gaining more than 2% against the dollar at one point compared with its levels late Friday.
"With the email issue now put to bed at least for now, it is clearly favorable for Clinton's chances at the election," said Ray Attrill, global head of currency strategy at National Australia Bank.
Equity markets rallied too, in a sign stock investors now believe a victory for Mrs. Clinton over her Republican rival Donald Trump in Tuesday's election is now more likely. The latest Wall Street Journal/NBC News poll found that 44% of likely voters support Mrs. Clinton, while 40% support Mr. Trump. Mrs. Clinton's four-point lead is less than half the 11-point edge she enjoyed in a mid-October poll.
A victory for the Democrats Tuesday is expected to be less disruptive for markets and therefore more supportive of an increase in U.S. interest rate in December.
Japan's Nikkei was up 1.3%, while Hong Kong's Hang Seng Index was up 0.4%, South Korea's Kospi was up 0.7% and Australia's S&P/ASX 200 was up 1.3%.
U.S. stock futures were also higher with the S&P 500 contract up 1.3% and Dow futures up 1.1%.
"Markets are likely to remove some of the risk premium taken as a precaution against a Trump victory now that Hillary Clinton will not be charged over her use of a private email server," wrote Ric Spooner, chief market analyst at CMC Markets, in a note.
Investors, though, are likely to remain wary ahead of the election this week after a campaign that has proven highly unpredictable,
"We could see a period of high drama before we get the announcement" of a winner or evenafter that, said Chris Weston, chief market strategist at IG. "The playbook is so diverse you don't know how to trade this."
The British pound also weakened against the dollar Monday, on track to snap a 3-day winning streak. Over the weekend, British Prime Minister Theresa May told European leaders she would stick to her timetable for leaving the European Union, despite a court ruling last week that Parliament must approve Mrs. May's plans to trigger an exit from the EU. The pound fell 0.3% to $1.2474 in early Asian trading.
Write to Willa Plank at firstname.lastname@example.org, James Glynn at email@example.com and Hiroyuki Kachi at firstname.lastname@example.org
(END) Dow Jones Newswires
November 06, 2016 21:42 ET (02:42 GMT)
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