Yen jumps in Asia on US budget fears
AFPTOKYO--The yen jumped in Asia Monday as a budget impasse in Washington threatens to bring the U.S. government to a halt, while the euro was weighed by political tensions in Italy.
October 1, 2013, 12:09 am TWN
The dollar weakened to 97.84 yen in Tokyo, from 98.24 yen in New York Friday afternoon, while the euro slipped to 131.95 yen from 132.88 yen.
The European single currency also slipped to US$1.3485 from US$1.3519.
The U.S. government is on the brink of shutting down after the House of Representatives approved a Republican bill seeking to delay President Barack Obama's health care law.
Obama has threatened to veto any bill that undercuts his sweeping health overhaul, and with no agreement likely before a deadline of midnight on Monday the government is close to its first shutdown in 17 years.
“Markets are bracing for the worst, with risk aversion rising, U.S. equities and the U.S. dollar falling,” Credit Agricole said.
But the bank added that “it's not just in the U.S. where politics is fuelling market tensions.”
In Italy, Prime Minister Enrico Letta is battling to save his coalition from collapse after former premier Silvio Berlusconi said he was pulling his party's ministers out of the cabinet.
Efforts to form a coalition government in Germany continue after Chancellor Angela Merkel's election victory last weekend.
Investors are also watching a European Central Bank meeting this week, with the euro down from multi-month highs as ECB officials voice concern about liquidity in the European banking system.
The dollar was mostly higher against other Asia-Pacific currencies.
It firmed to SG$1.2570 from SG$1.2553 on Friday, to 31.39 Thai baht from 31.22 baht, to 43.53 Philippine pesos from 43.28 pesos, to 11,655 Indonesia rupiah from 11,264 rupiah and to 62.78 Indian rupees from 61.85 rupees.
The greenback also edged up to 1,073.88 South Korean won from 1,073.85 won.
The Australian dollar slipped to 93.11 US cents from 93.55 cents and the Chinese yuan fetched 15.97 yen from 16.08 yen.