The dollar was higher against the yen on Friday, amid hopes for a breakthrough on an agreement to end the U.S. government shutdown and raise the debt ceiling in time to avert a sovereign debt default.
Investor confidence was boosted as House Republicans and the Obama administration began a second day of negotiations on a deal to reopen the government and raise the U.S. debt ceiling for six weeks.
The U.S. risks running out of cash if the government borrowing limit is not raised by 17 October.
The dollar weakened in Asian trade Monday as lawmakers in Washington struggle to agree a budget deal that will avoid a damaging debt default.
In Singapore afternoon trade, the greenback slipped to 98.27 yen from 98.59 yen in New York late Friday.
The euro rose to $1.3565 from $1.3546 but dipped to 133.30 yen from 133.55 yen. Japanese markets are closed for a public holiday.
Republicans and Democrats were unable to find a compromise after a rare Sunday session to hammer out a deal to reopen the federal government and raise the country's borrowing limit before a October 17 deadline.
USD/JPY ended Friday's session at 98.56, up 0.40% for the day. For the week, the pair gained 1.93%.
The euro moved higher against the dollar as market sentiment improved, with EUR/USD up 0.14% to settle at 1.3540, and ending the week 0.30% lower.
Concerns over economic impact of the U.S budget and debt ceiling impasse fuelled expectations that the Federal Reserve will further delay plans to start phasing out its USD85 billion a month asset purchase program.
Wednesday's minutes of the Fed's September meeting said the decision not to begin tapering stimulus was a "close call," with all but one voting member opting to leave the program unchanged.
Data released on Friday showed that U.S. consumer sentiment fell to the lowest level in nine months in October, as concerns over the impact of the government shutdown weighed.
The University of Michigan's consumer sentiment index declined to 75.2 from a final reading of 77.5 in September, and below expectations for a reading of 76.0.
Elsewhere, the pound was lower against the dollar on Friday, following the release of data showing that U.K. construction sector output unexpectedly fell by 0.1% in August. Earlier in the week, data showed that industrial and manufacturing output also dropped unexpectedly in August.
GBP/USD slipped 0.13% to settle at 1.5946, and ended the week with losses of 0.94%.
In the week ahead, investors will continued to closely monitor political developments in Washington. On Monday, markets in the U.S. and Canada are to remain closed for national holidays.
Monday, October 14
Markets in Japan are to be closed for a national holiday.
Australia is to release data on home loans, an important indicator of demand in the housing sector.
China is to publish data on consumer inflation, which accounts for the majority of overall inflation.
Switzerland is to release data on producer price inflation, a leading indicator of consumer inflation.
The euro zone is to release data on industrial production.
Tuesday, October 15
The Reserve Bank of Australia is to publish its monetary policy meeting minutes, which contain valuable insights into economic conditions from the bank's perspective.
The U.K. is to produce official data on consumer price inflation and producer price inflation.
The ZEW Institute is to release its closely watched report on German economic sentiment, a leading indicator of economic health, as well as data on economic sentiment in the wider euro zone. The euro zone is to release official data on industrial production.
The U.S. is to release a report on manufacturing activity in the Empire state.
Wednesday, October 16
New Zealand is to release data on consumer price inflation.
The U.K. is to release official data on the change in the number of people unemployed and the unemployment rate, as well as data on average earnings.
The ZEW Institute is to publish a report on economic expectations in Switzerland, a leading indicator of economic health.
The euro zone is to release data on consumer price inflation.
Canada is to produce data on manufacturing sales, a leading economic indicator.
Thursday, October 17
Australia is to publish a private sector report on business confidence, an important economic indicator.
The U.K. is to produce data on retail sales, the government measure of consumer spending, which accounts for the majority of overall economic activity.
The U.S. is to publish the weekly government report on initial jobless claims, as well as data on manufacturing activity from the Philly Fed.
Friday, October 18
China is to release data on third quarter gross domestic product, the broadest indicator of economic activity and the leading measure of the economy's health, in addition to data on industrial production.