US Government Shutdown Ends as House Passes Funding Bill; Global Markets React to Yen Weakness, Oil Outlook

By / / Breaking News

Key Takeaways

  • The US House of Representatives passed a critical government funding bill by a 222-209 vote, officially ending the 43-day federal shutdown. President Donald Trump is expected to sign the bill tonight at 9:45 PM ET.
  • The EUR/JPY currency pair surged to a new record high of 179.49, while the Japanese yen weakened following comments from the Prime Minister and Bank of Japan (BOJ) Governor Ueda regarding a gradual approach to interest rate hikes and wage-driven inflation.
  • The Energy Information Administration (EIA) revised its US oil output forecast higher, projecting that an oversupply will exert downward pressure on crude prices.
  • China's central bank fixed the yuan reference rate at 7.0865 against the dollar.
  • Flight reductions in the US, previously capped at 6% due to air traffic control absences during the shutdown, are expected to ease with the government reopening.

The U.S. government shutdown, the longest in the nation's history at 43 days, is officially set to conclude. The House of Representatives successfully passed a government funding bill with a 222-209 vote, sending the legislation to President Donald Trump for his signature. The White House has confirmed that President Trump will sign the bill tonight at 9:45 PM ET, bringing an end to the fiscal impasse that has impacted federal operations and services across the country. The bipartisan measure saw support from six Democrats and opposition from two Republicans in the final vote.

The resolution of the shutdown is expected to alleviate disruptions, including those in air travel. Earlier, the Federal Aviation Administration (FAA) had mandated 6% flight reductions at 40 of the busiest U.S. airports due to a significant rise in air traffic control absences attributed to the shutdown. With the government set to reopen, officials anticipate a return to more normal operations, though a full recovery in air travel may take some time.

In global markets, the Japanese yen continued its depreciation, with the EUR/JPY currency pair reaching a new record peak of 179.49. This weakening of the yen comes amid remarks from Bank of Japan (BOJ) Governor Kazuo Ueda, who reiterated the central bank's focus on achieving moderate inflation driven by wage increases. Ueda indicated that a tight labor market is expected to keep upward pressure on wages, supporting the view that stable inflation is taking hold. Japan's Finance Minister Satsuki Katayama also stated that it is hard to foresee Japan defaulting on its debt, given that Japanese Government Bonds (JGBs) are predominantly held by domestic investors. Meanwhile, the Nikkei share average in Tokyo trading rose by 0.46%.

Elsewhere in Asia, China's central bank fixed the yuan reference rate at 7.0865 against the dollar, a move that signals an official desire to guide the yuan higher against the U.S. dollar, pushing back against market expectations for weakness.

In the energy sector, the Energy Information Administration (EIA) has updated its US oil output forecast, raising expectations for domestic production. The EIA projects that this anticipated oversupply will likely weigh on global crude oil prices in the coming months.

Disclaimer: This article is for informational purposes only and does not constitute financial advice. We are not financial professionals. The authors and/or site operators may hold positions in the companies or assets mentioned. Always do your own research before making financial decisions.
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