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Forex - USD/JPY close to 2-1/2 year high after fiscal cliff deal

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Investing.com - The U.S. dollar was trading close to a two-and-a-half year peak against the broadly weaker yen on Wednesday after U.S. lawmakers reached an agreement to avert the fiscal cliff, dampening demand for the traditional safe haven yen.

USD/JPY hit 87.33 during late Asian trade, the pair's highest since late July 2010; the pair subsequently consolidated at 87.19, gaining 0.52%.

The pair was likely to find support at 85.85, the low of December 28 and resistance at 88.49.

U.S. lawmakers passed a compromise bill on Tuesday to avoid the fiscal cliff, blocking a series of looming tax increases and spending cuts that could have pushed the U.S. economy back into a recession.

U.S. President Barack Obama hailed the deal as "just one step in the broader effort to strengthen the economy".

Sentiment on the yen was also hit by ongoing expectations for more aggressive easing measures by the Bank of Japan.

The yen was trading close to an 18-month trough against the euro, with EUR/JPY jumping 1.12% to 115.77.

Later Wednesday the Institute of Supply Management was to produce a report on U.S. manufacturing growth.

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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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