Markets turn risk-on as US government agency closure averted…
The government agency closure was unavoidable due to the problem of the US budget ceiling shortfall, but was averted just before the closure due to a last minute McCarthy’s proposal in favour of centrist Republicans and Democrats.
As a result, this week, risk-on movements began early on Monday morning, with the dollar and yen crosses being bought.
However, the negative impact of the government shutdown was not that great to begin with, and in that sense, the averted government shutdown does not make for a furious risk-on. Moreover, the rally in the Nikkei may have provided a perfect escape for foreigners who have been selling Japanese stocks recently.
Dollar buying is likely to be led by the euro-dollar, pound-dollar and others. The dollar is likely to be heavily sold between 149.80 and 150.00 yen, but it may rise at any moment.
The situation should be monitored closely.