Investing.com - The dollar rose to the highest level since October 2008 against the yen on Friday, before turning modestly lower as investors locked in gains from the Federal Reserve's decision to begin tapering its monthly bond-buying program.
USD/JPY rose to 104.64, the highest level since October 6, 2008, before pulling back to 103.19, ending the session 0.14% lower, but still up 0.87% for the week.
The pair is likely to find support at 103.77, the low of December 19 and resistance at 104.64, Friday’s high.
Demand for the greenback remained supported after the Fed said Wednesday that it would reduce its USD85 billion-a-month bond buying program by USD10 billion in January, amid indications of an improving U.S. economy.
The U.S. central bank reiterated that interest rates are likely to remain low even after the unemployment rate drops below 6.5%, the threshold at which the Fed has previously said it would start to consider rate increases.
On Friday, the Commerce Department said that the U.S. economy expanded by 4.1% in the third quarter, well above initial estimates for 3.6% growth, adding to signs that the economic recovery is deepening.
Meanwhile, the Bank of Japan kept its pledge to expand the monetary base by an annual JPY60 trillion to JPY70 trillion on Friday, in line with expectations.
In the near-term outlook, the BoJ said the economy will "basically maintain the moderate recovery trend" despite sharp fluctuations in domestic demand - high spending before the April 2014 sales tax hike.
In the week ahead, the U.S. is to release key reports on durable goods orders, new home sales and jobless claims, while the BoJ will release the minutes of its most recent policy-setting meeting.
Trading volumes are expected to remain light due to the Christmas holiday and as many traders already closed books before the end of the year, reducing liquidity in the market and increasing the volatility.
Ahead of the coming week, Investing.com has compiled a list of these and other significant events likely to affect the markets.
Monday, December 23
Markets in Japan will remain closed in observance of the Emperor's Birthday.
The U.S. is to produce government data on personal spending and expenditure, while the University of Michigan is to release revised data on consumer sentiment and inflation expectations.
Tuesday, December 24
The U.S. is to release data on durable goods orders, a leading indicator of production, as well as a report on new home sales.
Wednesday, December 25
BoJ Governor Haruhiko Kuroda is due to speak at the Japan Business Federation, in Tokyo. His comments will be closely scrutinized for clues regarding future monetary policy.
Markets in the U.S. will remain closed for the Christmas Day holiday.
Thursday, December 26
The Bank of Japan is to publish the minutes of its latest policy meeting, which contain valuable insights into economic conditions from the bank’s perspective.
Later in the day, the Labor Department is to release the weekly report on initial jobless claims.
Friday, December 27
Japan is to release a series of data, including reports on household spending, inflation, retail sales and industrial production.
Meanwhile, the U.S. is to round up the week with a report on crude oil supplies.
USD/JPY rose to 104.64, the highest level since October 6, 2008, before pulling back to 103.19, ending the session 0.14% lower, but still up 0.87% for the week.
The pair is likely to find support at 103.77, the low of December 19 and resistance at 104.64, Friday’s high.
Demand for the greenback remained supported after the Fed said Wednesday that it would reduce its USD85 billion-a-month bond buying program by USD10 billion in January, amid indications of an improving U.S. economy.
The U.S. central bank reiterated that interest rates are likely to remain low even after the unemployment rate drops below 6.5%, the threshold at which the Fed has previously said it would start to consider rate increases.
On Friday, the Commerce Department said that the U.S. economy expanded by 4.1% in the third quarter, well above initial estimates for 3.6% growth, adding to signs that the economic recovery is deepening.
Meanwhile, the Bank of Japan kept its pledge to expand the monetary base by an annual JPY60 trillion to JPY70 trillion on Friday, in line with expectations.
In the near-term outlook, the BoJ said the economy will "basically maintain the moderate recovery trend" despite sharp fluctuations in domestic demand - high spending before the April 2014 sales tax hike.
In the week ahead, the U.S. is to release key reports on durable goods orders, new home sales and jobless claims, while the BoJ will release the minutes of its most recent policy-setting meeting.
Trading volumes are expected to remain light due to the Christmas holiday and as many traders already closed books before the end of the year, reducing liquidity in the market and increasing the volatility.
Ahead of the coming week, Investing.com has compiled a list of these and other significant events likely to affect the markets.
Monday, December 23
Markets in Japan will remain closed in observance of the Emperor's Birthday.
The U.S. is to produce government data on personal spending and expenditure, while the University of Michigan is to release revised data on consumer sentiment and inflation expectations.
Tuesday, December 24
The U.S. is to release data on durable goods orders, a leading indicator of production, as well as a report on new home sales.
Wednesday, December 25
BoJ Governor Haruhiko Kuroda is due to speak at the Japan Business Federation, in Tokyo. His comments will be closely scrutinized for clues regarding future monetary policy.
Markets in the U.S. will remain closed for the Christmas Day holiday.
Thursday, December 26
The Bank of Japan is to publish the minutes of its latest policy meeting, which contain valuable insights into economic conditions from the bank’s perspective.
Later in the day, the Labor Department is to release the weekly report on initial jobless claims.
Friday, December 27
Japan is to release a series of data, including reports on household spending, inflation, retail sales and industrial production.
Meanwhile, the U.S. is to round up the week with a report on crude oil supplies.