USD/JPY tumbles to near 153.00 as US government shutdown woes persist
The USD/JPY pair slumps to near 153.05 during the early Asian session on Friday. The US Dollar (USD) faces some selling pressure as the US government shutdown extends further, hitting a record with still no solution in sight. The flash Michigan Consumer Sentiment survey will be in the spotlight later on Friday.
The government shuttered on October 1 after Congress failed to break a stalemate over funding negotiations. Concerns over a prolonged US government shutdown and uncertainty continue to undermine the Greenback against the JPY. The Senate is not currently set to vote on a House-passed measure to reopen the government on Thursday, after it failed to advance for the 14th time on Tuesday.
“The current shutdown looks likely to have the greatest economic impact of any shutdown on record,” Alec Phillips, chief political economist at Goldman Sachs, wrote in a recent report.
Furthermore, the Challenger report showed that companies cut over 150,000 jobs in October, marking the biggest reduction for the month in more than 20 years. The announcement prompted the Federal Reserve (Fed) to lower interest rates at their December meeting and weigh on the USD.
Minutes of the Bank of Japan’s (BoJ) September meeting showed on Wednesday that a growing number of policymakers at the central bank believed that conditions were falling into place for interest rates to rise, with two members advocating an immediate increase. The hawkish BoJ minutes could provide some support to the JPY in the near term.
However, the uncertainty about the timing of the next Bank of Japan (BoJ) move could drag the JPY lower and act as a tailwind for the cross. Analysts expect Japan's new Prime Minister Sanae Takaichi will pursue aggressive fiscal spending plans and resist policy tightening.
Source: Fxstreet
