Forex - USD/JPY weekly outlook: May 27 - 31

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Investing.com - The dollar ended the week sharply lower against the yen on Friday amid speculation that the Federal Reserve will scale back its asset purchase program this year.

USD/JPY hit session lows of 100.67 Friday, before paring back losses to settle at 101.29, down 0.71% for the day and extending the week's losses to 1.43%.

The pair is likely to find support at 100.53, the low of May 10 and resistance at 102.57, Friday's high.

On Wednesday Fed Chairman Ben Bernanke said a decision to scale back the U.S. central bank's USD85 billion-dollar-a-month asset purchase program could be taken in the "next few meetings" depending on economic data.

The comments came during testimony on the economy and monetary policy to the U.S. Joint Economic Committee in Washington.

The dollar rose to fresh four-and-a-half year highs against the yen earlier Wednesday after Bernanke said in prepared remarks that a premature tightening of monetary policy carried substantial risks to the economic recovery.

Meanwhile, Wednesday's minutes from the Fed's May meeting showed a "number" of policymakers were prepared to taper bonds purchases as soon as June.

The dollar hit two-week lows against the yen on Friday after official data showed that U.S. durable goods orders rose 3.3% in April, outstripping expectations for a 1.5% increase.

The Bank of Japan left monetary policy unchanged following its policy meeting on Wednesday, in a widely expected decision.

The bank also upgraded its economic outlook, saying growth had started picking up.

Also Wednesday, official data showed that Japan posted a trade deficit of JPY0.76 trillion in April, the tenth consecutive monthly deficit. Exports rose 3.8% from a year earlier, while imports were up 9.4%.

In the week ahead, volumes look likely to remain thin on Monday, with public holidays in the U.K. and the U.S.

Investors will be looking ahead to BoJ minutes as well as data on Japanese retail sales. The U.S. is to release data on the housing sector, consumer confidence and initial jobless claims.

Ahead of the coming week, Investing.com has compiled a list of these and other significant events likely to affect the markets.

Monday, May 27

The Bank of Japan is to release the minutes of its most recent monetary policy meeting. The minutes contain valuable insights into economic conditions from the bank's perspective.

U.S. markets are to remain closed for the Memorial Day holiday.

Tuesday, May 28

The U.S. is to produce private sector data on house price inflation, in addition to data on consumer confidence, a leading economic indicator.

Wednesday, May 29

Japan is to release government data on retail sales, the government measure of consumer spending, which accounts for the majority of overall economic activity.

Thursday, May 30

The U.S. is to release revised data on first quarter economic growth, in addition to the weekly report on initial jobless claims and data on pending home sales.

Friday, May 31

Japan is to produce official data on household spending and inflation as well as preliminary data on industrial production, a leading economic indicator.

The U.S. is to round up the week with revised data on consumer sentiment from the University of Michigan, as well as data on personal income and expenditure and a report on manufacturing activity in Chicago.




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This article appears in: Investing , Forex and Currencies

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