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Forex - Dollar weakens against yen on Fed easing speculation

Published 07/16/2012, 03:15 AM
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Investing.com - The U.S. dollar slipped to an almost one-month low against the yen on Monday, amid talk that Federal Reserve Chairman Ben Bernanke will hint at fresh stimulus measures in a report on the U.S. economy to the Senate on Tuesday.

USD/JPY hit 78.97 during late Asian trade, the pair’s lowest since June 20; the pair subsequently consolidated at 79.02, shedding 0.21%.

The pair was likely to find support at 78.60, the low of June 15 and resistance at 79.38, Friday’s high.

Investors were looking ahead to Bernanke's testimony to the Senate on Tuesday, amid ongoing speculation over whether the U.S. central bank will introduce more easing to stimulate the economy.

In June, Bernanke said the Fed remained prepared to take additional steps to support economic growth if necessary, including additional asset purchases.

The yen remained supported after the Bank of Japan held off from expanding monetary stimulus at last week’s policy meeting, as signs of strength in the domestic economy outweighed the risk from the debt crisis in the euro zone.

Trade volumes remained light on Monday, with markets in Japan closed for a national holiday.

The yen was also higher against the euro and the pound, with EUR/JPY down 0.38% to 96.60 and GBP/JPY sliding 0.36% to 1.22.87.

Later in the day, the U.S. was to publish official data on retail sales and business inventories, as well as a report on manufacturing activity in New York.

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