Global Markets Jolt: Yen Drops Amid U.S. Shutdown Resolution

The yen hit its lowest since February as riskier currencies stayed firm against the dollar, driven by hopes that the U.S. government shutdown would end soon. The Senate passed a deal to restore federal funding, influencing currency movements with the Australian dollar seeing gains and yen facing pressure.

The yen slid to its weakest position since February as optimism over the resolution of the U.S. government shutdown boosted riskier currencies against the dollar. Lawmakers made headway on a deal to restore federal funding, propelling currency dynamics with the Australian dollar registering notable gains while the yen struggled.

In Washington, the U.S. Senate's agreement to end the prolonged shutdown is poised to move through the House under Speaker Mike Johnson's leadership, with an expedited push towards President Trump's desk. This political breakthrough prompted currency traders to anticipate broader financial implications on global markets.

Stronger sentiment for risk assets saw the Australian dollar appreciate significantly and risk-averse currencies like the yen falter. Experts note the changing interest rate landscape, particularly between the U.S. and Japan, as a pivotal factor affecting the yen's weakness. Market analysts are also keeping a close watch on diverging economic signals from regions like New Zealand and South Korea.

(With inputs from agencies.)