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Forex - USD/JPY hits 3-day low, to retest pre-intervention levels

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Forexpros - The U.S. dollar was down for a third day against the yen on Tuesday, surrendering nearly all the gains made in the wake of last week's Japanese intervention to stem the yen's strength.

USD/JPY hit 77.04 during late Asian trade, the lowest since August 4; the pair subsequently consolidated at 77.31, retreating 0.57%.

The pair was likely to find short-term support at 76.77, the low of August 3 and resistance at 78.46, Monday's high.

The yen approached its highest level versus the greenback since Tokyo's intervention last week, prompting Japanese Finance Minister Yoshihiko Noda to say that he was closely watching market movements "with a sense of urgency".

Meanwhile, Bank of Japan Governor Masaaki Shirakawa said that the central bank is always ready to take appropriate monetary policy action if needed, while carefully examining economic and price conditions.

Appearing before parliament's financial committee, Shirakawa said that he expects Japan's economy to return to moderate growth, but highlighted growing discomfort with a strong yen and increased overseas risks to the economy.

Also Tuesday, minutes of the BOJ's most recent policy setting meeting showed that its board was increasingly worried about the global economic outlook, while two of its members advocated further monetary easing.

Last Thursday, Japan intervened to curb the yen's gains for the first time since March. In addition, the BOJ announced additional monetary easing to further bolster growth, pledging to buy more assets such as stocks and bonds.

The yen was also higher against the euro, with EUR/JPY shedding 0.31% to hit 109.91.

Later in the day, the U.S. was to publish preliminary data on nonfarm productivity and labor costs.

In addition, the Federal Reserve was to announce the federal funds rate. The announcement will be followed by the bank's rate statement, which could provide hints regarding further monetary easing.

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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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