Forex - USD/JPY softens from multi-year high on talk of BoJ changes

Shutterstock photo - The dollar traded higher against the yen on Monday, down slightly after hitting highs not seen since 2010 as the market priced in the possibility that Japanese Prime Minister Shinzo Abe will name a Bank of Japan chief who supports his calls for looser monetary policies.

In U.S. trading on Monday, USD/JPY was trading at 89.37, up 0.20%, up from a session low of 80.80 and off a high of 89.67.

The pair was likely to find support at 80.80, the session low, and resistance at 91.48, the high from June 21. 2010.

Abe said earlier he favored appointing a "bold" head of the Bank of Japan to help craft policy to spur growth and avoid deflationary pressures, which sent the yen falling against most major currencies.

Current Bank of Japan Governor Masaaki Shirakawa's term ends in April, and expectations that a replacement will favor Abe's calls for looser policy and greater tolerance for inflation sent the yen diving on Monday.

Meanwhile, the dollar saw demand after European industrial output data came in weaker than expected.

Official eurozone data released earlier revealed that industrial production among member countries fell 0.3% in November, down for the third consecutive month, missing expectations for a 0.1% increase.

The dollar also held higher against the yen as market participants remained camped out in safe-haven greenback positions to await a speech from Fed Chairman Ben Bernanke later Monday.

Investors were hoping for guidance from the top U.S. central banker as to if and when the Fed may consider winding down monetary stimulus measures.

The yen, meanwhile was up against the pound and down against the euro, with GBP/JPY down 0.16% and trading at 143.64 and EUR/JPY trading up 0.39% at 119.47.

On Tuesday, the U.S. will publish government data on retail sales, the leading indicator of consumer spending, which comprises the majority of economic activity, as well as official data on producer price inflation.

In addition, the U.S. is to release data on manufacturing activity in New York state and a report on business inventories. - offers an extensive set of professional tools for the Forex, Commodities, Futures and the Stock Market including real-time data streaming, a comprehensive economic calendar, as well as financial news and technical & fundamental analysis by in-house experts.

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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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