The Japanese Yen strengthened against all of its most traded peers on Monday and came close to hitting a five-week high against the US Dollar as the federal government shutdown drags on into a second week.
Comments made by US Treasury Secretary Jacob J. Lew bolstered demand for the safe haven Yen after he called for an extension to the deadline for the nation’s debt limit in order to avoid a default. The comments sparked panic in the market as investors took it as a sign that no deal will be reached between the Republicans and Democrats.
“The deadline to avoid a U.S. government default is approaching, and risk aversion is building, The weekend brought no agreement in Washington, and until we have one, the yen is likely to be bought as a haven,” said Toshiya Yamauchi, a senior analyst in Tokyo.
The market is dominated by events in the US and until a deal is made that is unlikely to change. The Yen found more support as a result of the governmental shutdown preventing the publication of US economic data. The lack of reports has caused investors to increase their bets that the Federal Reserve will choose to refrain from tapering its monetary easing programme, a move which will weaken the Dollar but bolster emerging market currencies.
Some traders and economists are optimistic that a deal in the US will be made as the October 17th debt ceiling deadline draws nearer.
Chief economist at the Bank of Singapore Richard Jerram said in a interview with Bloomberg television; “At the end of the day, the view is that these guys might be crazy, but they’re not suicidal, we should get a deal sometime in the next week.”
If no deal is made soon the Japanese Yen is likely to strengthen further.
Current Japanese Yen (JPY) Exchange Rates:
< Down > Up
The US Dollar/Japanese Yen Exchange Rate is currently in the region of: 96.9655 <
The Pound Sterling/Japanese Yen Exchange Rate is currently in the region of: 155.7752 <
The Euro/Japanese Yen Exchange Rate is currently in the region of: 131.7077 <
The New Zealand Dollar/Japanese Yen Exchange Rate is currently in the region of: 80.4028 <
The Australian Dollar/Japanese Yen Exchange Rate is currently in the region of: 91.2484 <
(Correct as of 10:45 pm GMT)