Yen sinks to record low vs euro as Japan PM touts slow rate hikes

Currency Market Overview - The dollar eased after the U.S. government shutdown ended, while the yen hit a record low against the euro due to Japan's new prime minister advocating for slow rate hikes [1][5] - The Australian dollar reached a two-week high following a significant drop in the unemployment rate, reducing the likelihood of further rate cuts [2] Economic Data Impact - Currency markets may experience volatility as a backlog of economic data is released after the government shutdown, although some key figures for October may not be published [3] - The resolution of the Congressional impasse has removed uncertainty and a major growth headwind for markets [4] Yen and Interest Rate Dynamics - The yen traded at 179.805 per euro before recovering slightly, and approached a low of 155.02 per dollar, indicating significant weakness [5] - Japanese officials expressed concerns over yen weakness, with Finance Minister warning about rapid movements in the foreign exchange market [6] - A weak yen could compel the Bank of Japan to consider rate hikes, with traders estimating a 22% chance of a quarter-point increase in December and 43% by January [6] - Economists suggest that the government's survival may depend on managing the exchange rate, indicating a potential acceptance of rate hikes by the Bank of Japan to mitigate yen weakness [7]