Forex - USD/JPY falls on uncertainty over Fed stimulus program

A A A - The dollar fell against the yen on Tuesday amid ongoing uncertainty as to whether or not the Federal Reserve will announce plans to scale back its USD85 billion in monthly bond purchases at its monetary policy meeting next week

In U.S. trading on Monday, USD/JPY was trading at 102.70, down 0.56%, up from a session low of 102.58 and off a high of 103.39.

The pair was likely to find support at 101.62, Thursday's low, and resistance at 103.39, the earlier high.

A surprisingly strong November jobs report bolstered the dollar in recent sessions by fanning talk the Federal Reserve may announce plans to taper the pace of its USD85 billion in monthly bond purchases at its Dec. 17-18 monetary policy meeting.

Friday data revealed that the U.S. economy added 203,000 jobs in November, beating expectations for a 180,000 increase and up from a downwardly revised 200,000 rise the previous month.

Also on Friday, the preliminary Thomson Reuters/University of Michigan consumer sentiment index increased to 82.5 in December from 75.1 the previous month, far surpassing expectations for a 76.0 reading.

By Monday, renewed uncertainty as to whether or not the U.S. central bank will wait until early 2014 after reviewing more data before deciding on tapering softened the greenback.

The yen was up against the pound and up against the euro, with GBP/JPY down 0.42% and trading at 168.94 and EUR/JPY trading down 0.35% at 141.40.
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This article appears in: Investing , Forex and Currencies

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