The dollar traded moderately below ¥98.50 in late Tokyo trading Tuesday, with traders waiting to see a U.S. congressional deal to end the prolonged government shutdown and avert a catastrophic debt default.
At 5 p.m. the dollar stood at ¥98.40-41, up from ¥98.28-29 at the same time Friday. The euro was at $1.3558-3559, little changed from $1.3560-3561 dollars, and at ¥133.41-44, up from ¥133.28-31. The Tokyo market was closed Monday for Sports Day.
Hopes that U.S. lawmakers are soon to reach an accord to end the fiscal stalemate lifted the greenback as high as around ¥98.70 in the morning.
However, it shed the early gains in the wake of Tokyo stocks losing steam after a robust start.
“Without concrete progress (in the U.S. fiscal crisis), a wait-and-see mood has prevailed,” an official at a major Japanese bank said.
The currency market was little affected by a policy speech delivered by Prime Minister Shinzo Abe at the extraordinary Diet session that convened Tuesday because he did not mention new economic measures.
Democrats and Republicans in the U.S. were reportedly negotiating plans to enact a three-month budget to end the government shutdown and raise the debt-borrowing limit so the government can pay its bills until mid-February. Without a deal by Thursday, the federal government will be forced to default on its obligations.
Still, such temporary measures would leave political uncertainties intact in the United States, continuing to cap the dollar’s topside, an official at a foreign exchange margin trading service provider said.