Yen, euro extend slide against dollar on fiscal concerns
Concerns about more fiscal spending in Japan and political uncertainty in France drove the Japanese yen and euro lower against the U.S. dollar on Tuesday, with traders also focused on any signs of when the U.S. federal government will reopen.
The yen fell to a six-month low after Sanae Takaichi’s leadership victory in Japan on Saturday.
Takaichi, who is expected to become Japan's next prime minister, has pledged to boost the Japanese economy with aggressive spending and has been critical of the Bank of Japan's interest rate hikes.
Money market traders are now pricing in just a 26% chance that the BoJ will raise interest rates at its next policy meeting on October 30, from around 60% before Takaichi's leadership victory.
Against the Japanese yen , the dollar was last up 0.37% at 150.88. It earlier reached 151.02, the highest since March 28.
Japan's finance minister said authorities were watching out for excessive moves in currency markets.
EURO ON THE BACK FOOT
The euro remained on a fragile footing following the resignation of France's prime minister on Monday, adding to pressure on President Emmanuel Macron and putting fiscal consolidation in doubt.
France is now likely to miss a deadline to present its 2026 budget bill, meaning lawmakers will need to pass emergency stopgap legislation to authorize spending from January 1 until a full budget is approved.
The single currency was last down 0.4% at $1.1662.
The dollar index rose 0.36% to 98.47.
The U.S. currency has weakened this year on concerns about a deteriorating fiscal outlook, expectations of slowing growth and fears that President Donald Trump's tariff policies will scare investors away from U.S. assets.
The shutdown delayed last Friday's closely watched monthly jobs report for September and is set to postpone other key releases until the government reopens.
Source : Reuters.com
