Investing.com - The U.S. dollar hit an 11-month high against the yen on Wednesday, as expectations for a fresh round of U.S. monetary stimulus were hit after the Federal Reserve upgraded its outlook for the economy.
USD/JPY hit 83.41 during early European trade, the pair’s highest since April 15, 2011; the pair subsequently consolidated at 83.38, gaining 0.54%.
The pair was likely to find support at 82.87, the session low and resistance at 84.86, the high of April 13, 2011.
In its rate statement on Tuesday, the Fed said it now expects to see “moderate economic growth” after its January statement said growth would be “modest” and added that higher oil prices could place upward pressure on inflation.
The central bank also acknowledged the recent improvement in the labor market, saying it expected the unemployment rate to “decline gradually.”
However, policymakers reiterated their intention to keep the benchmark interest rate unchanged at a record low through late 2014 and warned that risks to the economic recovery still remained.
The yen has remained under pressure since last month’s surprise decision by the Bank of Japan to ease monetary policy and set a targeted inflation rate, while the country’s increasing trade deficit has threatened the yen’s traditional safe haven status.
The yen was slightly lower against the euro, with EUR/JPY adding 0.19% to hit 108.75.
Later in the day, the U.S. was to produce official data on the country’s current account, as well as data on import prices and crude oil stockpiles. In addition, Federal Reserve Chairman Ben Bernanke was due to speak; his comments would be closely watched.
USD/JPY hit 83.41 during early European trade, the pair’s highest since April 15, 2011; the pair subsequently consolidated at 83.38, gaining 0.54%.
The pair was likely to find support at 82.87, the session low and resistance at 84.86, the high of April 13, 2011.
In its rate statement on Tuesday, the Fed said it now expects to see “moderate economic growth” after its January statement said growth would be “modest” and added that higher oil prices could place upward pressure on inflation.
The central bank also acknowledged the recent improvement in the labor market, saying it expected the unemployment rate to “decline gradually.”
However, policymakers reiterated their intention to keep the benchmark interest rate unchanged at a record low through late 2014 and warned that risks to the economic recovery still remained.
The yen has remained under pressure since last month’s surprise decision by the Bank of Japan to ease monetary policy and set a targeted inflation rate, while the country’s increasing trade deficit has threatened the yen’s traditional safe haven status.
The yen was slightly lower against the euro, with EUR/JPY adding 0.19% to hit 108.75.
Later in the day, the U.S. was to produce official data on the country’s current account, as well as data on import prices and crude oil stockpiles. In addition, Federal Reserve Chairman Ben Bernanke was due to speak; his comments would be closely watched.