Investing.com - The dollar fell to five-week lows against the yen on Wednesday as worries over the impact of a U.S. government shutdown bolstered demand for the safety of the yen.
USD/JPY hit 97.32 during late Asian trade, the lowest since August 28; the pair subsequently consolidated at 97.39, shedding 0.63%.
The pair was likely to find support at 96.30, the low of August 7 and resistance at 98.07, the session high.
The dollar weakened against the yen amid fears that the first U.S. government shutdown for 17 years would curb the economic recovery and prompt the Federal Reserve to maintain its stimulus program for longer.
Last month the U.S. central bank took markets by surprise with a decision to keep its stimulus program on track, saying it wanted to see more evidence of a sustained economic recovery before tapering.
Markets were also mulling over how the political deadlock in Washington will impact on negotiations to raise the U.S. debt ceiling, which the U.S. Treasury Department has estimated will be reached by October 17.
The yen was also higher against the euro, with EUR/JPY dropping 0.71% to 131.59.
In the euro zone, Italian Prime Minister Enrico Letta was due before parliament for a vote of confidence later Wednesday, after Silvio Berlusconi pulled his ministers out of the coalition government on Saturday.
Investors were also looking ahead to the outcome of the European Central Bank’s latest policy meeting and press conference with President Mario Draghi.
USD/JPY hit 97.32 during late Asian trade, the lowest since August 28; the pair subsequently consolidated at 97.39, shedding 0.63%.
The pair was likely to find support at 96.30, the low of August 7 and resistance at 98.07, the session high.
The dollar weakened against the yen amid fears that the first U.S. government shutdown for 17 years would curb the economic recovery and prompt the Federal Reserve to maintain its stimulus program for longer.
Last month the U.S. central bank took markets by surprise with a decision to keep its stimulus program on track, saying it wanted to see more evidence of a sustained economic recovery before tapering.
Markets were also mulling over how the political deadlock in Washington will impact on negotiations to raise the U.S. debt ceiling, which the U.S. Treasury Department has estimated will be reached by October 17.
The yen was also higher against the euro, with EUR/JPY dropping 0.71% to 131.59.
In the euro zone, Italian Prime Minister Enrico Letta was due before parliament for a vote of confidence later Wednesday, after Silvio Berlusconi pulled his ministers out of the coalition government on Saturday.
Investors were also looking ahead to the outcome of the European Central Bank’s latest policy meeting and press conference with President Mario Draghi.