Investing.com - The dollar slipped lower against the yen on Tuesday, despite fresh hopes that politicians in Washington are closer to agreeing a deal to raise the U.S. debt ceiling and reopen the federal government.
USD/JPY pulled back from 98.71, the session high, to hit 98.40 during late Asian trade, 0.17% lower for the day.
The pair was likely to find support at 97.91, the low of October 11 and resistance at 98.69, the session high.
The dollar touched session highs against the yen after Senate Majority Leader Harry Reid said Monday that “tremendous progress” had been made towards a deal, fuelling hopes that a compromise can be reached.
If an agreement to raise the government borrowing limit is not struck ahead of Thursday’s deadline, the U.S. will face an unprecedented sovereign debt default.
However, any potential deal will still have to be approved by the House of Representatives, where Speaker John Boehner would have to decide whether to allow a vote or demand federal spending cuts.
Elsewhere, the yen was slightly higher against the euro, with EUR/JPY slipping 0.12% to 133.50.
The ZEW Institute was to release its closely watched report on German economic sentiment later Tuesday, while the U.S. was to release a report on manufacturing activity in the Empire state.
