The U.S. Dollar Index edged higher against a weighted basket of its peer though investors remain wary ahead of a looming deadline in Washington, D.C., which could mean the closure of the federal government. Though troubling in and of itself, a larger political crisis is on the horizon when the issue of the federal debt ceiling is debated; failure by the government to increase the government’s spending authority later this month might result in the federal government defaulting on its debt which would post a tremendous risk to the world’s largest economy with far-reaching implications.
As reported at 1:51 p.m. (JST) in Tokyo, the U.S. Dollar Index traded at 80.291 .DXY, a gain of 0.1% which market players say can be attributed primarily to a rise in the U.S. Dollar’s value relative to its Japanese rival. The USD/JPY traded at 98.53 Japanese Yen, a gain of 0.3% and more than 100 pips from Monday’s 1-month trough of 97.48 Japanese Yen.
More Stimulus in Japan Expected
The Japanese currency is under renewed selling pressure as the Prime Minister is likely to announce an increase in sales tax as part and parcel of his ongoing effort to stimulate the Japanese economy. A recently released survey of Japanese business sentiment had an unexpectedly improved reading which analysts believe will give Shinzo Abe the green light for further stimulus measures.