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Forex - Dollar higher against yen as Cyprus fears ease

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Investing.com - The dollar was higher against the yen on Tuesday as concerns over disruption to financial markets in the euro zone from a bailout deal for Cyprus eased, dampening safe haven demand.

USD/JPY hit 95.75 during late Asian trade, the pair's highest since Friday; the pair subsequently consolidated at 95.45, up 0.20%.

The pair was likely to find support at 94.30, Monday's low and resistance at 96.26, Friday's high and an almost three-and-a-half year peak.

The yen strengthened against the dollar and the euro amid increased safe haven demand on Monday following news that a one-time tax was to be imposed on bank deposit holders as part of a EUR10 billion bailout deal for Cyprus.

The agreement marked the first time since the onset of the euro zone debt crisis that depositors have been forced to take a haircut in return for financial aid.

Market sentiment stabilized as initial fears over the risk of contagion to other countries in the euro zone eased.

Investors were looking ahead to the outcome of the Federal Reserve's policy meeting on Wednesday after data on Friday showing that U.S. inflation was contained in February left the way clear for the bank to continue its asset purchase program.

Elsewhere, the Bank of Japan was to come under new leadership on Wednesday, amid expectations for more aggressive easing measures at the bank's next policy meeting in April.

The yen was almost unchanged against the euro, with EUR/JPY inching up 0.02% to 123.38.

The ZEW Institute was to release its closely watched index of German economic sentiment later Tuesday, while the U.S. was to release official data on building permits and housing starts.

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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 Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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