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Forex - Yen falls against dollar after Japan bank loans report

Published 04/12/2010, 03:57 AM
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Investing.com – The yen fell against the U.S. dollar on Monday after a Bank of Japan report showed that outstanding loans held by Japanese banks fell 1.8% in March from a year earlier, the biggest decline in more than four years.

USD/JPY hit 93.47 during early European trade, gaining 0.32%. The pair was likely to find support at 89.63, the low of March 9, and resistance at 94.69, the high of April 2.

The BOJ's report came after minutes from its mid-March meeting suggested that the central bank could further loosen monetary policy in the coming months, as many policy board members played up the effectiveness of extra easing even as the economy recovers and deflation eases.

The yen also slumped against the euro and pound on Monday, with EUR/JPY jumping 1.08% to reach 127.14 and GBP/JPY climbing 0.74% to hit 144.29.

Later in the day, the United States was due to release its federal budget balance, which reports the difference in value between the federal government's income and spending.

Also Monday, the BOJ will publish its monthly Corporate Goods Price Index, a measure of the change in the price of goods sold by corporations, which is an important indicator of consumer inflation.

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