USD/JPY back under 98 as Shutdown Looms

The dollar dropped to a one-month low against the yen as political wrangling over the budget threatened a U.S. government shutdown from tomorrow.

The U.S. currency extended its first quarterly drop versus the yen since a year ago with Congress deadlocked over Republicans’ insistence on delaying the 2010 health-care law. The yen climbed against all 16 major peers and reached a three-week high per the euro as demand for safety increased with Italian Prime Minister Enrico Letta’s government on the verge of collapse. The pound was at the highest since January before data tomorrow forecast to show manufacturing accelerated.

The dollar touched 97.53 yen, the least since Aug. 29, before trading 0.4 percent lower at 97.84 yen as of 11:48 a.m. in Tokyo. Japan’s currency added 0.7 percent to 132 versus Europe’s 17-nation tender and reached 131.38, the strongest since Sept. 9. The euro declined 0.2 percent to $1.3497.


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