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Forex - USD/JPY lower as Summers trumps tapering fears

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Investing.com - The Japanese yen traded higher against the U.S. dollar during Monday's Asian session as traders in the region opted to shelf tapering fears in favor of a focus on news that former U.S. Treasury Secretary Larry Summers has withdrawn from consideration to be the next chairman of the Federal Reserve.

In Asian trading Monday, USD/JPY lost 0.53% to 98.83. The pair is likely to find support at 98.53, the low of September 6 and resistance at 99.97, Friday's high.

The dollar came under some pressure against the yen last Friday due to some tepid data out of the world's largest economy. Last Friday, the Commerce Department said U.S. retail sales rose 0.2% in in August, below expectations for a 0.4% increase.

A separate report showed that the preliminary reading of the University of Michigan's consumer sentiment index fell to a five month low of 76.8, from a final reading of 82.1 in August.

The dollar weakened amid renewed uncertainty over whether the Fed will start to unwind its USD85 billion-a-month asset purchase program at its upcoming policy meeting on September 17-18.

Still, tapering fears may have been set aside, albeit temporarily as traders focus on who President Barack Obama will opt to pick to lead the Fed now that Summers is out of contention.

The presumptive pick is Fed Vice-Chairwoman Janet Yellen and markets seem to like that idea because Yellen is far more dovish than is Summers. However, there is speculation that Yellen is not a shoe-in for the nomination and there are some rumors that former Treasury Secretary Timothy Geithner could be a candidate.

Elsewhere, EUR/JPY inched up 0.02% to 132.13 while AUD/JPY rose 0.51% to 92.33.

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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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