Yen climbs as coalition cracks, gold prices dip

Breathless bulls took a break on Friday as record-setting stocks and gold prices dipped and the dollar headed for its best week in over a year after a run of falls for the yen and euro.

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A day after a historic ceasefire between Israel and Hamas, the political developments were still coming thick and fast - and continuing to move markets.

Japan's yen was jolted out of its slide and the Nikkei dropped 18 on news the Komeito party was quitting its coalition with the Liberal Democratic Party (LDP).

That raised doubts over still-to-be-confirmed new Prime Minister Sanae Takaichi, whose pledges of major fiscal stimulus and calls for the Bank of Japan to hold off rate hikes have sapped the yen and lifted the Nikkei 68 until Friday.

“If Takaichi doesn’t become prime minister, or at least can't govern effectively, you don't really have much of a ‘Takaichi trade’,” said Chris Scicluna, head of research at Daiwa Capital Markets Europe.

European markets also saw a low key start as traders there waited to see whether France's President Emmanuel Macron can find a way out of his country’s political crisis.

He is expected to name his sixth prime minister in under two years later, a personality who faces the vexing mission to steer a belt-tightening budget through a deeply fragmented parliament.