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Yen Weakens as Senate Funding Step Fuels Bets on Swift U.S. Reopening

Markets are betting on a mid-November restart, leaving gains vulnerable if the timeline slips.

Japanese yen and U.S. dollar banknotes are seen in this illustration picture taken June 15, 2022. REUTERS/Florence Lo/Illustration

Overview

  • A bill to restore federal funding cleared an initial Senate hurdle, advancing efforts to end the longest U.S. government shutdown on record.
  • House Speaker Mike Johnson said the chamber could vote as soon as Wednesday and send the measure to President Donald Trump if the Senate moves quickly.
  • The yen hovered near nine-month lows around the 154 per dollar area as risk-sensitive currencies such as the Australian dollar and sterling outperformed in recent sessions.
  • Treasury yields edged higher and equity futures firmed as traders priced a reopening that would restart delayed U.S. data releases, beginning with the September employment report that will inform the Fed’s December decision.
  • Analysts warned that reopening by about November 15 is largely priced, and any delay could reverse recent FX and equity gains, even as BOJ minutes pointed to growing support for a near-term rate hike.