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LDP loses majority in Japan; yen hits 153/dollar

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Oil slides 4% on restrained Israel strike

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"Magnificent 7" earnings, US job data in focus

SINGAPORE, Oct 28 (Reuters) - The yen hit a three-month

low on Monday as Japan's ruling party lost its parliamentary

majority, while oil tumbled after Israel's weekend strike on

Iran bypassed oil or nuclear targets.

Japan's Nikkei, after initially falling, rose 1.6% and

the yen slipped as far as 0.5% to 153.3 per dollar

following the ruling Liberal Democratic Party's (LDP) weakest

result since 2009 in Japan's weekend election.

Brent crude futures were 4.2% lower and traded as

cheaply as $67.80 a barrel after Israel's response to an Iranian

missile attack focused, so far, on missile factories and other

sites near Tehran and not on disrupting energy supplies.

In Japan, the LDP which has ruled for most of the post-war

years and junior coalition partner Komeito won 215 lower-house

seats at Sunday's election, public broadcaster NHK reported.

This falls well short of the 233 needed for a majority and the

yen was squeezed since investors figured any government that

emerges is likely to make a dovish shift in economic policies.

"The markets are likely to think this means more trouble for

the yen with 155 the first target and (the finance ministry's)

line in the sand at 160," said Bob Savage, head of markets

strategy and insights at BNY in a note.

Gains in the stock market, which often moves in the opposite

direction to the yen as a weaker currency can help exporters,

were led by technology companies.

RISING DOLLAR

Broader currency markets were steady, leaving the dollar on

course for its largest monthly rise in 2-1/2 years as signs of

strength in the U.S. economy and the prospect of a Donald Trump

presidency have driven U.S. yields sharply higher.

At 4.23%, benchmark 10-year Treasury yields are

up 43 basis points through October, against a rise of 16 bps for

10-year bunds and 23 bps for gilts.

Markets price almost no chance of a Federal Reserve rate cut

at its November meeting, down from a 50% chance of a 25 bp cut a

month ago, according to CME's FedWatch tool.

The euro was steady on Monday at $1.0796 and down

3% through October. The New Zealand dollar has lost

nearly 6% through the month, additionally weighed by a dovish

central bank and disappointing stimulus plans from China.

Elsewhere U.S. stock futures rose 0.5% in early trade

ahead of a big week of earnings and data.

Five of the "Magnificent Seven" group of megacap companies

are set to report: Google parent Alphabet, Microsoft ( MSFT )

, Facebook owner Meta, Apple ( AAPL ) and

Amazon ( AMZN ).

The U.S. jobs report on Nov. 1 comes as investors are

weighing whether a stronger-than-expected economy could lead to

fewer interest rate cuts, while inflation readings are due in

Europe and Australia.

Weekend data showed China's industrial profit dived 27.1% in

September versus a year earlier.

Gold, which hit record highs last week, hovered just

shy of those levels at $2,736 an ounce.