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Forex - Japanese yen a tad stronger ahead of industrial production data

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Investing.com -

Investing.com - The Japanese yen was slightly stronger in Asia on Wednesday with eyes on industrial production in Japan.

At 0850 in Tokyo (2350 GMT) June industrial output is due and forecast to fall 1.2% on month, the first drop in two months.

USD/JPY traded at 102.11, down 0.01%, while AUD/USD held at 0.9385, up 0.01%.

Overnight, the dollar strengthened against most major currencies after a widely-watched gauge of U.S. consumer confidence beat expectations.

The Conference Board reported that its consumer confidence index rose to 90.9 in July from an upwardly revised 86.4 in June. It was the highest reading since October 2007, defying consensus forecasts for a decline to 85.3.

The data sent investors betting that the Federal Reserve on Wednesday will make fresh cuts to its monthly bond-buying program and deliver an upbeat take on the U.S. economy.

Fed asset purchases which have stimulated the economy off and on since the 2008 crisis coupled with low interest rates tend to weaken the dollar by sending investors to stocks, while talk of an end to such loose policies often bolsters the U.S. currency.

While markets expect the Fed to wrap up its bond-buying program this year-likely some time in or around October-uncertainty still persists as to how much time will pass after stimulus programs conclude and rate hikes begin, with data driving investor guesses on Fed timetables.

Hopes for a robust July jobs report due out on Friday also firmed the greenback.

Elsewhere in the U.S., investors took in stride the S&P/Case Shiller Home Price Index.

The 20-city composite index for May grew 9.3% year-over-year, down from April's 10.8% reading, though the 10-city index grew 9.4%, down from April's 10.9%, though markets have priced in slackness in the U.S. housing sector.

The US Dollar Index, which tracks the performance of the greenback versus a basket of six other major currencies, was flat at 81.31.

On Wednesday, the dollar will move on the Fed's statement on interest rates and monetary policy as well as revised second-quarter U.S. GDP growth data and also on the ADP report on private sector job creation.

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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.

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