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Forex - USD/JPY climbs to 4-day high on Japan election hints

Published 11/14/2012, 03:14 AM
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Investing.com - The U.S. dollar climbed to a four-day high against the yen on Wednesday, as hints of anticipated elections in Japan weighed on demand for the nation's currency, while concerns over the handling of Greece's financial troubles supported the safe haven greenback.

USD/JPY hit 79.95 during European morning trade, the pair's highest since November 8; the pair subsequently consolidated at 79.90, advancing 0.67%.

The pair was likely to find support at 79.38, the session low and resistance at 80.22, the high of November 1.

The yen came under pressure after Japanese Prime Minister Yoshihiko Noda earlier said he could dissolve the lower house of the parliament on November 16, which suggests that an election may be held next month.

Analysts believe that an election is likely to usher in a new government that will be more aggressive in putting pressure on the Bank of Japan to ease its policy.

Meanwhile, sentiment found some support after German newspaper Bild reported on Tuesday that Greece is to receive EUR44 billion of financial aid in one payment, citing German government sources.

But markets remained jittery amid ongoing divisions between officials from the International Monetary Fund and Europe on how best to reduce Greece’s debt to manageable levels.

A decision on unlocking the country’s next tranche of aid, worth EUR31.5 billion, has been postponed until 20 November.

The yen was sharply lower against the euro with EUR/JPY gaining 0.82%, to hit 101.68.

Later in the day, the U.S. was to produce government data on retail sales, producer price inflation and business inventories. In addition, the Federal Reserve was to publish the minutes of its most recent policy-setting meeting.


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