Investing.com-- Most Asian currencies weakened on Monday with the Japanese yen sliding to a three-month low amid bets that the loss of a parliamentary majority for Japan’s ruling party diminished the prospect of higher interest rates in the country. Risk appetite was buoyed by Israel launching a less severe strike on Iran than traders were fearing, with oil prices falling sharply on this notion. But this translated into limited gains for regional currencies, as growing expectations of smaller U.S. interest rate cuts kept traders biased towards the dollar.  The greenback rose to a near three-month high on Monday. Anticipation of several key economic readings this week- from Asia and the U.S.- still kept overall risk appetite subdued. Japanese yen weakens, USDJPY surges after election upsetThe Japanese yen was the worst performer in Asia on Monday, with the USDJPY pair rising 0.9% to 153.68 yen- its highest level since late-July.The yen was battered by local media reports showing a coalition led by Japan’s ruling Liberal Democratic Party did not win a majority in the parliamentary elections held on Sunday. The LDP will now have to seek coalitions with smaller regional parties to retain power- a scenario that presents a more fractured political outlook for Japan. Traders bet that increased political uncertainty will keep the Bank of Japan from hiking interest rates further- a scenario that bodes poorly for the yen.The BOJ is set to meet later this week and is widely expected to keep rates unchanged, after two hikes earlier in 2024. Recent economic readings also showed Japanese private spending and inflation was cooling after an uptick earlier in the year.