Image Source: Pixabay
 

The USD/JPY pair attracts some sellers to near 153.65 during the early Asian session on Wednesday. The US Dollar (USD) edges lower against the Japanese Yen (JPY) amid growing concerns over the ongoing US government shutdown. The ADP Employment Change and the US ISM Services Purchasing Managers Index (PMI) data for October will be in the spotlight later on Wednesday. 

The US government shutdown is set to become the nation’s longest federal funding lapse ever after a short-term funding bill failed in the Senate once again. The latest effort to break the logjam, by passing a Republican-backed temporary legislation through Congress, failed in the Senate for the 14th time on Tuesday.

There are no further votes scheduled on Tuesday on the GOP’s short-term continuing resolution, and growing concerns over a prolonged shutdown could exert some selling pressure on the Greenback in the near term.

Additionally, fears of potential intervention from Japanese officials could support the JPY and act as a headwind for the pair. Japan’s Finance Minister Satsuki Katayama said on Friday that it was “important for currencies to move in a stable manner, reflecting fundamentals.” He further added that the government was “closely watching FX moves with a high sense of urgency.”

On the other hand, the uncertainty over the timing of the next Bank of Japan (BoJ) rate hike might weigh on the JPY. Even though BoJ Governor Kazuo Ueda last week signalled that a rate hike was possible as soon as December, markets remained underwhelmed by the central bank's gradual approach. Traders expect Japan's new Prime Minister Sanae Takaichi to pursue aggressive fiscal spending plans.

More By This Author: