USD/JPY near 98.50 as U.S. Budget Talks Spur Haven Appeal

The yen and dollar held gains versus most major peers as stocks in Asia and the U.S. dropped amid concern over budget talks that risk a federal government shutdown, sparking demand for haven currencies.

The greenback remained stronger before data forecast to show new home sales rebounded in August, a sign the housing market is beginning to adjust to a jump in financing costs. New Zealand’s dollar fell after the nation’s trade deficit unexpectedly widened last month.

“The U.S. dollar and the yen still look to be the main global safe-haven currencies,” said Sean Callow, a senior currency strategist at Westpac Banking Corp. (WBC) in Sydney. “The impact of the congressional standoff, potential shutdown, and gamesmanship over the debt ceiling on global investor confidence and risk appetite was very negative the last time they did all this.”


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