Asian session: The yen dropped

The yen dropped versus all 16 major peers as Asian stocks advanced, sapping demand for safer assets, as U.S. lawmakers continued fiscal negotiations to avert a default.

The dollar climbed for a fourth day against the Japanese currency as U.S. Republicans and President Barack Obama pledged further discussions on a debt-limit increase and government shutdown. Obama didn’t accept or reject House Republicans’ plan to increase the debt limit as the two sides pledged to keep talking about avoiding default and ending the partial government shutdown. Both sides described the talks as constructive with a week remaining until U.S. borrowing authority lapses.

Dollar gains may stall before a report today predicted to show confidence among U.S. consumers declined to the lowest level since January this month. The Thomson Reuters/University of Michigan preliminary index of sentiment decreased to 75.6 this month from 77.5 in September, according to the median estimate in a Bloomberg News survey.

A report on U.S. retail sales scheduled to be released today is among those that have been delayed by the partial U.S. government closure that began Oct. 1 after Republicans insisted on changes to a 2010 health-care law.

Aussie gains may be sustained before a report tomorrow that will probably show imports by China climbed for a third-straight month. Chinese imports rose 7 percent in September from a year earlier, according to the median estimate in a Bloomberg poll. China is Australia’s largest trading partner.

EUR / USD: during the Asian session the pair rose to $1.3545

GBP / USD: during the Asian session, the pair rose to $1.5985

USD / JPY: during the Asian session the pair rose to Y98.55

There is only limited UK data set for release, with August construction spending data due at 0830GMT. Output is seen up 0.8% on month, up 3.9% on year. There is another full calendar Friday, as central bank governors and finance officials gather in Washington for G20/IMF/World Bank meetings. US government-released data still remains off the calendar as the shutdown continues, despite better mood music out of DC. European data starts at 0600GMT, with the release of the September final HICP numbers and the September wholesale sales data. HICP is seen unchanged on the month, higher by 1.4% on year. At 0645GMT, the French August current account numbers are due to be published. At 0700GMT, Spain's September final HICP numbers are set for release. At 0800GMT, Italian September final HICP numbers will cross the wires. Italy's HICP is seen up 0.9% Y/Y. Sovereign issuance sees Italy conduct its medium-long BTP and floater CCTeu issues for up to E7.0bln.