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Forex - USD/JPY steady as possible BoJ intervention eyed

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Forexpros - The U.S. dollar was steady against the yen on Wednesday, trading close to a record low, as investors remained wary of a possible intervention by Japanese officials to curb the yen's sharp gains.

USD/JPY hit 77.40 during late Asian trade, the daily high; the pair subsequently consolidated at 77.19, inching up 0.05%.

The pair was likely to find support at 76.12, the low of March 17 and an all-time low and resistance at 77.82, Tuesday's high.

The outlook for global growth remained downbeat after data on Tuesday showed that U.S. consumer spending dropped in June for the first time in nearly two years and incomes barely rose.

The risk of a U.S. sovereign debt downgrade lingered, despite the passage through the Senate of a bill to raise the country's debt ceiling by at least USD2.1 trillion, averting a U.S. default.

Following passage of the bill, Moody's Investor Services affirmed the U.S.'s triple A credit rating, but warned that it could still be downgraded on concerns that fiscal discipline will ease, further debt reduction measures won't be adopted and the economy will weaken.

Earlier Wednesday, Bank of Japan Governor Masaaki Shirakawa said that the yen's recent gains posed a threat to Japan's largely export based economy.

Japan's Finance Minister Yoshihiko Noda reiterated that the government would continue to "carefully" watch market moves.

Meanwhile, the yen was lower against the euro, with EUR/JPY rising 0.40% to hit 110.02.

Later in the day, payroll processing firm ADP was publish a report on U.S. non-farm payrolls, while the U.S. Institute of Supply Management was to publish data on service sector growth.

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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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