Yen gains as US debt worries concern markets

14 October, 2013

Weekend talks in Washington over the US debt ceiling ended without any progress in the gridlock, raising concern for investors who are nervous as the October 17 deadline comes closer.

If the borrowing limit is not raised by this date, the US government will soon be unable to pay its debts and will run out of money, probably causing a domino effect to the rest of global markets. 

Investors will closely monitor these debt negotiations and hope a last-minute compromise will be reached.

The US markets will be closed today for the Columbus Day public holiday, so trading in the dollar will likely be subdued.

The lack of news on the debt talks caused a boost to the safe haven yen. Also adding to damp market sentiment was disappointing China data which showed export growth unexpectedly slowed in September. China is the world’s second largest economy, so any weak data has an impact on markets.

The safe haven yen gained for the first time in four days against the dollar, with USDJPY gapping lower and trading down 0.3 percent to 98.25 yen.

Against the euro, the yen rose 0.2 percent to 133.27 per euro. 

The dollar weakened against the euro, down 0.2 percent to $1.3565 per euro.


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