- The Japanese Yen (JPY) rises for a fifth day
- Yen rises on safe haven flows and after hawkish BoJ minutes
- The US Dollar (USD) falls versus its major peers
- US ADP payrolls fell -32k vs 50k rise forecast
The US dollar Japanese yen (USD/JPY) exchange rate is falling for a fifth day. The pair fell 0.38% in the previous session, settling on Tuesday at 148.03. On Wednesday at 16:00 UTC, USD/JPY trades -0.62% at 147.13 and traded in a range of 146.59 to 148.23.
The Japanese yen is rising on safe-haven demand after the US government officially went into shutdown.
Other safe havens, such as gold, also rose to record highs as investors worried about the potential impact of a prolonged U.S. government shutdown on the world’s largest economy.
The shutdown comes as the Democrats and the Republicans have failed to reach a deal to continue funding the federal government across the coming year.
Meanwhile, the yen is also finding some support after the Bank of Japan’s summary of opinions set the stage for a possible near-term rate hike from the BoJ.
The meeting minutes revealed that many policymakers called for vigilance in the face of mounting inflationary pressures, adding to signs of a hawkish shift on the board.
The US Dollar is falling across the board. The US Dollar Index, which measures the greenback against a basket of major currencies, is falling 0.10% at 97.68, marking the fourth day of losses.
The US dollar is falling as the U.S. government shutdown continues, and after weaker-than-expected data. U.S. economic data.
ADP payrolls declined by 32,000 in September, well below the 50,000 economists had expected and down from a downwardly revised 3,000 in August.
The data adds to evidence that the US labour market is cooling and that US employers have been cautious about hiring.
The ADP report will be the most high-profile report on the labour market this week, as the government’s nonfarm payroll report will be delayed owing to the ongoing shutdown.
Meanwhile, the September ISM manufacturing PMI remained in contraction, coming in at 49.1, which is below the 50 level that separates expansion from contraction. This marked the seventh consecutive month of contraction, as tariffs weakened orders and economic uncertainty weighed on factory activity.
