Yen firms on policymaker meeting, dollar up after debt deal

Tuesday,   30-May-2023   02:03 PM (IST)

The yen strengthened on Tuesday on news of a meeting of Japan's finance ministry and central bank, while elsewhere the dollar rose to a two-month high against a basket of its peers after the U.S. debt ceiling deal. The dollar was last down 0.18% against the Japanese yen at 140.18 after the country's finance ministry said senior officials from the Ministry of Finance, Bank of Japan and Financial Services Agency will meet from 5:30 p.m. (0830 GMT). The U.S. currency had hit a six-month high of 140.93 yen before the announcement. Japanese central bank policy has been a major focus for investors in the past year after the BOJ last year intervened to strengthen the yen. This year the focus has been on whether and when it will change its ultra-loose monetary policy stance. Elsewhere the dollar index, which measures the U.S. currency against six major peers, rose 0.2% to 104.51, its highest in 10 weeks. President Joe Biden and Republican House Speaker Kevin McCarthy on Sunday signed off on an agreement to temporarily suspend the U.S. debt ceiling and cap some federal spending in order to prevent a debt default. However a handful of hard-right Republican lawmakers said on Monday they would oppose a deal to raise the United States' $31.4 trillion debt ceiling, highlighting risks to it passing Congress before the limit is reached, likely by next Monday. Elsewhere, China's onshore yuan eased to as soft as 7.0995 per dollar after China's central bank set the fixing at the yuan's weakest level since December. The offshore yuan also weakened past a key level of 7.1 per dollar. The Turkish lira slipped further and weakened to a record low after President Tayyip Erdogan secured victory in the country's presidential election on Sunday.