The Japanese Yen (JPY) strengthened against the US Dollar (USD) on Tuesday, with USD/JPY falling for a third consecutive session as safe-haven flows intensified amid US government shutdown risks. The pair was last seen near 147.85, down almost 0.5% on the day.
Yen gains as investors look past weak Japan data
Markets largely ignored soft Japanese economic activity figures released earlier in the day, instead focusing on political gridlock in Washington. US President Donald Trump warned from the White House that “we’ll probably have a shutdown,” adding that Republicans could push for benefit cuts as part of spending talks. He also accused Democrats of taking a “risk” by resisting his proposals.
Chicago Fed President Austan Goolsbee played down the broader impact of short shutdowns, but emphasized that the economic fallout ultimately depends on their duration and scope. He added that while the labor market remains “pretty steady,” tariff risks could complicate the outlook if inflationary pressures persist.
US data fails to support dollar
Fresh US economic data offered limited support to the Greenback. The Conference Board’s Consumer Confidence Index fell to 94.2 in September, its weakest reading since April, while JOLTS Job Openings edged slightly higher to 7.23 million in August from 7.21 million in July, largely in line with expectations.
Outlook: data-heavy Wednesday ahead
Traders now await a string of economic releases that could guide near-term direction for USD/JPY. In Japan, the Bank of Japan’s closely watched Tankan survey is due Wednesday. In the US, focus shifts to ADP Employment Change, as well as S&P Global and ISM Manufacturing PMI reports, all set for release midweek.
