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Forex - USD/JPY holds steady as intervention threat weighs

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Forexpros - The U.S. dollar was fractionally lower against the yen on Tuesday, trading close to the all-time low as markets remained wary of a possible Japanese currency intervention to weaken the yen.

USD/JPY hit 76.73 during European morning trade, the daily low; the pair subsequently consolidated at 76.80, easing down 0.04%.

The pair was likely to find support at 76.29, the low of August 11 and short-term resistance at 77.22, the high of August 11.

Mounting fears over global growth prospects weighed on risk-sensitive currencies and boosted demand for traditional safe haven assets, such as the yen, Swiss franc and gold.

However, traders were wary to pile in to the yen, amid concerns Japanese officials will step in to the currency market to stem gains in the yen.

On Monday, Japanese Finance Minister Yoshihiko Noda sharpened his verbal warnings to markets, saying that he will continue to "closely watch the markets and take bold action if it becomes necessary."

Noda also warned that the yen's strength posed as a downside risk to the Japanese economic recovery.

Japan intervened to curb the yen's gains for the first time since March on August 4. In addition, the BOJ announced additional monetary easing to further bolster growth, pledging to buy more assets such as stocks and bonds.

Elsewhere, the yen was also up against the euro, with EUR/JPY shedding 0.45% to hit 110.46.

The single currency came under pressure following the release of disappointing data on economic growth in Germany and the wider euro zone.

Later in the day, the U.S. was to produce official data on building permits and housing starts, as well as reports on import prices, the capacity utilization rate and industrial production.

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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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