Forex - USD/JPY holds gains from solid U.S. economic data

A A A - The dollar traded slightly higher against the yen on Tuesday in choppy trading after better-than-expected U.S. economic indicators sent the greenback gaining, though profit taking sent the pair in and out of positive territory.

In U.S. trading on Tuesday, USD/JPY was trading at 97.74, up 0.01%, up from a session low of 96.67 and off a high of 98.06.

The pair was likely to find resistance at 98.70, Monday's high, and support at 96.97, the earlier low.

Better-than-expected economic indicators sent the dollar rising broadly on Tuesday by fanning already growing expectations for the Federal Reserve to taper stimulus programs in the coming months.

Stimulus programs such as the Fed's monthly USD85 billion bond-buying program weaken the dollar to spur recovery, and talk of their dismantling sends the dollar rising.

Data released earlier revealed that U.S. consumer confidence rose to its highest level since January 2008 this month.

The Conference Board said its index of U.S. consumer confidence rose to 81.4 in June from 74.3 in May, well above expectations for a reading of 75.4.

In a separate report, the Commerce Department said U.S. orders for durable goods rose 3.6% in May, outstripping expectations for a 3.0% gain.

Positive data from the housing market sent the dollar gaining as well.

The Commerce Department said U.S. new home sales rose by 2.1% to 476,000 units in May, the highest level since July 2008 and well above expectations for an increase of 1.3% to 462,000.

Home prices are on the rise as well.

The Standard & Poor's/Case-Shiller 20-city house price index rose 12.1% in April from a year earlier, above expectations for a 10.6% increase.

U.S. home prices in March rose by 10.9%.

The yen, meanwhile, was flat against the pound and up against the euro, with GBP/JPY up 0.01% and trading at 150.82 and EUR/JPY trading down 0.13% at 128.05.

On Tuesday, the U.S. is to release revised data on first quarter economic growth as well as government data on crude oil stockpiles. - offers an extensive set of professional tools for the Forex, Commodities, Futures and the Stock Market including real-time data streaming, a comprehensive economic calendar, as well as financial news and technical & fundamental analysis by in-house experts.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.

This article appears in: Investing , Forex and Currencies

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