Forex - USD/JPY almost unchanged ahead of ECB LTRO

Published 02/29/2012, 03:21 AM
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EUR/JPY
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Investing.com - The U.S. dollar was almost unchanged against the yen on Wednesday, as investors awaited the outcome of a vast liquidity operation by the European Central Bank later in the day.

USD/JPY hit 80.69 during early European trade, the daily high; the pair subsequently consolidated at 80.47, inching up 0.01%.

The pair was likely to find support at 80.12, the low of February 27 and resistance at 80.78, Tuesday’s high.

Markets remained focused on the ECB as it prepared to launch its second three-year long-term refinancing operation, after a similar liquidity injection in December averted a credit crunch and eased pressure on peripheral euro zone bond markets.

Meanwhile, preliminary data showed that industrial production in Japan rose more-than-expected in January, advancing 2% after a 3.8% rise the previous month.

Analysts had expected industrial production to rise 1.6% in January.

Commenting on the data, Bank of Japan board member Hidetoshi Kamezaki said that a rise in industrial output supports his view that Japan's economy will resume a recovery around the spring.

He warned however that further rises in crude oil prices amid heightening tensions over Iran could weigh on the global economy, including Japan's.

Elsewhere, the yen was fractionally lower against the euro with EUR/JPY adding 0.05%, to hit 108.35.

Later in the day, the U.S. was to release a preliminary report on fourth-quarter gross domestic product, followed by data on manufacturing activity in the Chicago area.

Federal Reserve Chairman Ben Bernanke was also due to testify on the semi-annual monetary policy report before the House Financial Services Committee in Washington.



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