Dollar weakens against yen on US budget fears

TOKYO: The dollar faced selling pressure against the yen Wednesday as investors fretted about an impasse over the US budget that could lead to a shutdown of parts of the economy.

The greenback fetched 98.64 yen in Tokyo midday trade, from 98.74 yen late Tuesday in New York, and well down from the levels above 99 yen seen Monday.

The euro bought 132.86 yen from 133.00 yen while it was flat against the dollar at $1.3469.

US lawmakers are approaching a Monday night deadline to find a deal on a new budget. If no agreement is reached some government agencies could be forced to shut down, which could deal a major blow to the US economic recovery.

"Fiscal D-day is looming, spooking investors," National Australia Bank said.

Traders began moving out of the greenback last week after the US Federal Reserve surprised markets by keeping its $85 billion-a-month bond-buying stimulus programme intact.

"Players who had expected the dollar's upturn on a change in the US monetary policy are now forced to review their strategies," a senior trader at a Japanese bank told Dow Jones Newswires.