Hopes of a deal to raise the US debt ceiling gave the JPY an early knock as risk appetite improved but things turned around after news that President Obama had rejected the proposal. Dollar-yen rallied to Y98.34 after ending in the US at Y98.18 and then flopped to an early low of Y97.92 after the rejection. Euro-yen got to Y132.96 and then turned down to a Y132.45 low. Since then, risk appetite has remained fairly positive with players taking comfort from the fact that US officials are still talking about a way out of the debt ceiling impasse. The mild risk-on has been somewhat limited while the market entered a wait-and-see mode. Dollar-yen edged higher, with charts showing the pair breaking back into the Ichimoku cloud soon after Japanese stocks opened. It continued to Y98.56 high and then eased away from the cloud top at Y98.68. Euro-yen also rebounded off the early low and climbed back through Y133.00 for a high of Y133.45. With Japanese markets closed for a holiday Monday, yen pairs are likely to kept confined within today’s ranges, hemmed in by orders on either side of the market, with importers seen buying dollar-yen near Y98.00 while exporters are said to have existing supply around the Y99.00 mark.
