USD/JPY back above 97 as Asian Stock Gain Saps Safety Demand

The yen fell against all of its 16 major peers, retreating from an eight-week high, as Asian stocks snapped a two-day decline, damping demand for safer assets.

Implied volatility on the dollar against the yen traded near a nine-month low, signaling investor confidence in a resolution to U.S. debt-ceiling talks, according to Westpac Banking Corp. (WBC) Japan’s currency strengthened yesterday by the most since Sept. 18 as U.S. President Barack Obama reiterated he won’t negotiate with Republicans over the borrowing limit. South Korea’s won weakened against all major counterparts as overseas investors cut holdings of local shares.

“Investors are thinking the U.S. debt ceiling will be sorted out in the end,”said Satoshi Okagawa, a senior global-markets analyst in Singapore at Sumitomo Mitsui Banking Corp., a unit of Japan’s second-largest financial group by market value. “Stocks are rebounding, spurring risk-on moves” and weighing on the yen, he said.


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