USD/JPY at 98.30 as U.S. Debt-Limit Talks Continue

The dollar halted three days of gains versus the yen as House Majority Leader Eric Cantor said “talks will continue” between Republicans and President Barack Obama on a debt-limit increase and government shutdown.

The yen briefly gained versus major peers after the New York Times reported Obama had rejected a Republican proposal for a short debt-ceiling increase. Japan’s haven currency pared the advance as statements from the White House and Republican leaders indicated no decision had been reached. Australia’s dollar was headed for back-to-back weekly gains against the greenback after the yield premium its two-year debt offers over the U.S. climbed to its highest since April.

“An agreement on the debt ceiling is seen as a risk-on catalyst, while the opposite is risk off — it’s as simple as that,” said Daisaku Ueno, the chief currency strategist at Mitsubishi UFJ Morgan Stanley Securities Co. in Tokyo. “It’s convenient to use dollar-yen to take part in this kind of swing trade.”


This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.