By Dow Jones Business News, September 30, 2013, 02:13:00 AM EDT
--Dollar falls to one-month low vs yen as a partial shutdown of U.S. government looms
--Greenback off earlier lows as investors buy back on bargain-hunting
By Tatsuo Ito
The dollar sank to a one-month low against the yen in Asia Monday, as concerns have risen that the U.S. government may
soon face a partial shutdown amid political wangling over federal finances.
While investors are optimistic the U.S. Congress will eventually avert a shutdown that could damage the U.S. economy,
the ongoing political showdown has kept them wary of taking risks, encouraging buying of the safe-haven the yen and
Swiss franc, dealers said.
Such concerns knocked the greenback as low as Y97.53 in early Asian trade, the lowest since Aug. 29, although the
dollar came off its low in afternoon trade as Japanese market participants moved in to snap up cheap dollars.
At 0450 GMT, the dollar was at Y97.97 against Y98.27 late Friday in New York.
"The currency market has estimated the possibility of a government shutdown at about half. But if that is actually the
case, the dollar is likely to fall below Y97.00," said Yuji Saito, director of foreign exchange at Credit Agricole in
The U.S. government is nearing its first shutdown since 1996, as House Republicans step up their drive to delay the
new health care law, and Senate Democrats stand firm against changing the law as a condition for funding federal
departments. Without a breakthrough, a lack of finances will shut down the U.S. government by midnight Monday, when the
current fiscal year expires.
"Market participants aren't feeling at ease, although they are optimistic about the prospects for budget negotiations
in which the U.S. would eventually move to avert a shutdown that harms the U.S. economy," said Koji Fukaya, chief
executive officer and foreign-exchange strategist at FPG Securities in Tokyo.
Dealers are also focusing on whether Prime Minister Shinzo Abe will formally announce Tuesday a planned tax hike from
April with an economic stimulus package of about Y5 trillion.
With sentiment already undermined by concerns about the U.S. budget issue, a decision on the sales tax by Mr. Abe may
give rise to concerns over a possible slowdown in the Japanese economy in the next business year staring April, Mr.
Saito said. "This may briefly push share prices down and weaken the dollar," he added.
The euro was at $1.3500 against $1.3522. The WSJ Dollar Index, which tracks the dollar against a basket of currencies,
was at 72.716 from 72.732.
Interbank Foreign Exchange Rates At 00:50 EST / 0450 GMT
Latest Previous %Chg Daily Daily %Chg
2150 GMT High Low 12/31
USD/JPY Japan 97.95-96 97.66-71 +0.28 98.05 97.68 +12.92
EUR/USD Euro 1.3500-02 1.3490-95 +0.06 1.3506 1.3480 +2.32
GBP/USD U.K. 1.6162-66 1.6141-47 +0.13 1.6179 1.6140 -0.51
USD/CHF Switzerland 0.9049-52 0.9060-67 -0.14 0.9067 0.9048 -1.11
USD/CAD Canada 1.0301-06 1.0313-22 -0.14 1.0318 1.0302 +3.79
AUD/USD Australia 0.9306-10 0.9308-15 -0.04 0.9321 0.9282 -10.44
NZD/USD New Zealand 0.8280-84 0.8273-81 +0.05 0.8288 0.8253 +0.05
EUR/JPY Japan 132.25-26 131.76-84 +0.34 132.39 131.76 +15.56
Source: ICAP PLC
Write to Tatsuo Ito at firstname.lastname@example.org
(END) Dow Jones Newswires
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