Investing.com - The dollar was trading close to three-week highs against the yen on Tuesday after Federal Reserve Chair Janet Yellen reassured investors that the central bank intends to keep interest rates low for an extended period.
USD/JPY was unchanged at 103.23, holding just below the three-week highs of 103.43 reached on Monday.
The pair was likely to find support at 102.78, Monday’s low and resistance at 103.50.
Speaking Monday, Ms. Yellen said that “considerable slack” still remained in the labor market and reiterated that the Fed’s commitment to economic stimulus will still be needed for some time.
The yen remained under pressure as expectations that China will implement fresh stimulus measures to shore up slowing growth dampened safe haven demand for the Japanese currency.
Data released on Tuesday showed that China’s official manufacturing purchasing managers’ index for March rose to 50.3 from 50.2 in February. However, a separate report showed that China’s HSBC manufacturing PMI fell to 48, the weakest level in a year-and-a-half, from a final reading of 48.5 in February.
Elsewhere, the euro edged higher against the yen, with EUR/JPY inching up 0.07% to 142.24, not far from Monday’s two-week highs of 142.59.
The single currency was little changed against the dollar, with EUR/USD inching up 0.04% to 1.3776, holding above Monday’s lows of 1.3720.
The euro initially fell against the dollar on Monday after data showed that the annual rate of euro zone inflation slowed to 0.5% in March, the lowest since November 2009. The weak data added to expectations that the European Central Bank will have to take further steps to stave off the threat of deflation in the region.