The yen reached an eight-week high against the dollar as U.S. President Barack Obama reiterated he won’t negotiate with Republicans over the debt limit, driving demand for Japan’s currency as a haven.
The yen strengthened by the most since Sept. 18 yesterday as the U.S. government’s partial shutdown continued for a seventh day. Demand for the euro was supported before a report today forecast to show a rebound in German factory orders. South Korea’s won weakened against most of its 16 major peers as overseas investors cut holdings of local shares.
“The risk of a stronger yen is increasing for the near term,” said Noriaki Murao, the New York-based managing director of the marketing group at Bank of Tokyo-Mitsubishi UFJ Ltd. “While it’s a remote possibility, a halt to U.S. debt repayment would have enormous impact — even if it’s a short period — so investors are likely to keep reducing risk assets.”
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