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Forex - USD/JPY edges higher on BoJ easing expectations

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Investing.com - The U.S. dollar pushed higher against the yen on Tuesday, as expectations that the Bank of Japan will implement more aggressive easing measures later this week weighed on demand for the yen.

USD/JPY hit 84.08 during late Asian trade, the session high; the pair subsequently consolidated at 83.99, easing up 0.13%.

The pair was likely to find support at 83.60, Monday's low and near-term resistance at 84.32, Monday's high and a 20-month high.

The yen touched its lowest level in more than a year and a half against the dollar on Monday after an election victory for Japan's Liberal Democratic Party fuelled expectations for further monetary easing by the BoJ.

Incoming Prime Minister and LDP leader Shinzo Abe has called for unlimited easing by the BoJ in order to meet the bank's 2% inflation target and spur growth in the recession hit economy.

Investors were looking ahead to official data on Japan's trade balance on Wednesday as well as the outcome of the upcoming BoJ policy meeting on Thursday.

Meanwhile, market sentiment was buoyed by hopes U.S. lawmakers will reach an agreement in time to avoid automatic tax hikes and spending cuts due to take effect on January 1 which investors' fears could derail the U.S. recovery and threaten global growth.

The yen was trading close to eight-month lows against the euro, with EUR/JPY edging up 0.10% to 110.53.

The U.S. was to produce government data on the current account later in the trading day.

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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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