Investing.com - The U.S. dollar climbed to a two-week high against the yen on Thursday, following remarks by European Central Bank President Mario Draghi and as upbeat U.S. economic data lowered expectations for imminent action by the Federal Reserve.
USD/JPY hit 78.92 during European late afternoon trade, the pair’s highest since August 22; the pair subsequently consolidated at 78.93, climbing 0.69%.
The pair was likely to find support at 78.38, the session low and resistance at 79.36, the high of August 22.
Speaking at the central bank’s post-policy meeting press conference, Draghi outlined a new bond purchasing program, dubbed Outright Monetary Transactions, which he said will provide "a fully effective backstop" against market volatility.
Draghi said "strict and effective conditionality” was an essential element of the plan, under which the ECB would unlimited amounts of bonds of up to three years in maturity.
The ECB will decide on when bond purchases will start and how long they will continue after a “full assessment”.
The ECB also slashed its forecast for economic growth for this year, to a contraction of 0.6%, from a previous forecast for a 0.2% contraction.
The comments came after the ECB maintained the benchmark interest rate at a record-low 0.75%, in line with market expectations at its policy meeting earlier in the day.
Meanwhile, the greenback found broad support after payroll processing firm ADP said U.S. non-farm private employment rose by a seasonally adjusted 201,000 in August, easily surpassing expectations for an increase of 140,000.
The previous month’s figure was revised up to a gain of 173,000 from a previously reported increase of 163,000.
A separate report showed that the number of people who filed for unemployment assistance in the U.S. last week fell by a more-than-expected 12,000 to a seasonally adjusted 365,000, compared to expectations for a decline of 7,000 to 370,000.
Elsewhere, the yen was lower against the euro with EUR/JPY advancing 0.50%, to hit 99.26.
Also Thursday, Bank of Japan Governor Masaaki Shirakawa said earlier that the strong yen has a big negative impact on the country's exports, corporate profits and business sentiment.
Later in the day, the U.S. was to release a report by the Institute for Supply Management on service sector activity.
USD/JPY hit 78.92 during European late afternoon trade, the pair’s highest since August 22; the pair subsequently consolidated at 78.93, climbing 0.69%.
The pair was likely to find support at 78.38, the session low and resistance at 79.36, the high of August 22.
Speaking at the central bank’s post-policy meeting press conference, Draghi outlined a new bond purchasing program, dubbed Outright Monetary Transactions, which he said will provide "a fully effective backstop" against market volatility.
Draghi said "strict and effective conditionality” was an essential element of the plan, under which the ECB would unlimited amounts of bonds of up to three years in maturity.
The ECB will decide on when bond purchases will start and how long they will continue after a “full assessment”.
The ECB also slashed its forecast for economic growth for this year, to a contraction of 0.6%, from a previous forecast for a 0.2% contraction.
The comments came after the ECB maintained the benchmark interest rate at a record-low 0.75%, in line with market expectations at its policy meeting earlier in the day.
Meanwhile, the greenback found broad support after payroll processing firm ADP said U.S. non-farm private employment rose by a seasonally adjusted 201,000 in August, easily surpassing expectations for an increase of 140,000.
The previous month’s figure was revised up to a gain of 173,000 from a previously reported increase of 163,000.
A separate report showed that the number of people who filed for unemployment assistance in the U.S. last week fell by a more-than-expected 12,000 to a seasonally adjusted 365,000, compared to expectations for a decline of 7,000 to 370,000.
Elsewhere, the yen was lower against the euro with EUR/JPY advancing 0.50%, to hit 99.26.
Also Thursday, Bank of Japan Governor Masaaki Shirakawa said earlier that the strong yen has a big negative impact on the country's exports, corporate profits and business sentiment.
Later in the day, the U.S. was to release a report by the Institute for Supply Management on service sector activity.