The dollar soared a three-month high versus the yen on Monday, after an emphatic election victory for Japan's ruling party which ensured that yen-weakening stimulus measures remain at the heart of government policy.

Prime Minister Shinzo Abe's ruling party recorded a huge victory in Sunday's election with his coalition keeping its two-thirds "super majority" in the lower house, local media said.

Following Abe’s victory, concerns over the disruption of the economic steps implemented under his leadership subsided. The Bank of Japan is now expected to press on with its super easy monetary policy.

USD/JPY climbed to 114.10 overnight and has eased back to below 113.80 at the start of European trade. The greenback was already bullish from Friday after the U.S. Senate approved a budget blueprint for the 2018 fiscal year, clearing a critical hurdle for Republicans to pursue a tax-cut package without Democratic support.

The dollar was lifted by rising U.S. yields, with the two-year yield touching a nine-year high, as the progress in tax reforms boosted expectations of increased U.S. Government borrowing and a possible pickup in inflation.

The dollar is also being boosted by hopes that President Trump’s nominee for the Federal Reserve Chair will push on with policy that has supported rising stock prices.

EUR/USD fell to 1.1751 on Monday. There are hopes that policymakers will reduce the amount of bond purchases at the European Central Bank policy meeting on Thursday.