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Forex - USD/JPY gains on debt bill vote

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Forexpros - The Japanese yen reversed gains against the U.S. dollar in Asian trade Monday, as the House of Representatives approved a measure to raise the U.S. debt ceiling limit just one day before the deadline.

In mid-day Asian trade USD/JPY hit 77.78, the pair's highest since Monday; the pair subsequently consolidated at 77.42, rising 0.27%.

The pair was likely to find support at 77.03, Monday's low, and resistance at 78.55, last Monday's high.

In the morning session, the yen gained ground against the dollar as the U.S. Institute of Supply Management's Manufacturing Index fell more than expected to 50.9 in July. That number was down from 55.3 the previous month and far below economist's forecast of a drop to 54.8.

But Japanese media reports Tuesday, that the Bank of Japan was preparing to intervene in currency markets in an effort to weaken the yen, provided upward momentum to the U.S. dollar.

Further underpinning dollar gains, the U.S. House of Representatives voted to approve a bill to raise the nation's debt limit, easing fears that the world's largest economy would default on its loans.

Meanwhile the yen moved lower against both the euro and the British poind with EUR/JPY up 0.44% to hit 110.47, and GBP/JPY higher by 0.41% to hit 126.34.

The House-approved bill moved to the Senate for a vote Tuesday, where it was expected to pass

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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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