Dollar edges down as investors await a US deal

TOKYO: The dollar eased against the yen in Asia on Tuesday as traders focus on Washington, where lawmakers say they are close to a deal to reopen the government and avert a debt default.

The greenback bought 98.43 yen in Tokyo trade against 98.67 yen in New York on Monday afternoon.

The euro bought $1.3558 and 133.58 yen compared with $1.3559 and 133.79 yen.

Japan's Finance Minister Taro Aso on Tuesday voiced growing frustration with the protracted US debt-ceiling standoff, calling on politicians to get to grips with the situation.

"Many of them don't seem to understand well the magnitude of the international impact this problem could have," he told a regular news conference.

The Tea Party, the Republican Party's ultra-conservative faction, have been berated as political novices bent on upending government, with members resisting efforts to pass spending bills or raise the debt limit without extracting dramatic concessions from the Obama administration.

Failure to raise the government's borrowing limit by October 17 would not only lower the value of Treasury bills held by Japan but would also rock international financial markets.

But there is growing hope that a deal to avert the crisis would be struck soon after a series of talks in Washington.

The dollar could climb toward the 99-yen level in the short-term, but not higher, as expectations increase that the crisis may be defused and a default averted, said Osamu Takashima, chief FX strategist at Citigroup Global Market Japan.

Top Senate leaders said they were within striking distance of an agreement Monday.

Signs of progress prompted the White House to postpone a meeting of key power brokers on the crisis that had been due to take place at 1900 GMT Monday.

"While the meeting has been postponed, optimism is rising that a deal could be reached within the next few days," Takashima said.

The dollar was mostly lower against other Asia-Pacific currencies.

It slipped to Sg$1.2428 from Sg$1.2458 on Monday, to Tw$29.36 from Tw$29.39, and to 10,931 Indonesian rupiah from 10,940 rupiah.

The greenback also sank to 1,066.75 South Korean won from 1,072.31 won, to 43.15 Philippine pesos from 43.16 pesos, and to 31.27 Thai baht from 31.31 baht.

The dollar firmed to 61.67 Indian rupees from 61.23 rupees.

The Australian dollar rose to 95.33 US cents from 94.68 cents, while the Chinese yuan bought 16.10 yen against 16.07 yen. (AFP)