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Forex - USD/JPY close to 3-week high, eyes on U.S. data

Published 09/07/2012, 07:25 AM
Updated 09/07/2012, 07:26 AM
USD/JPY
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EUR/JPY
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Forex - USD/JPY close to 3-week high, eyes on U.S. data

Investing.com - The U.S. dollar edged higher against the yen on Friday, to trade close to a three-week high as optimism surrounding the European Central Bank's new bond-buying program dampened demand for the safe haven yen.

USD/JPY hit 79.02 during European afternoon trade, the daily high; the pair subsequently consolidated at 78.99, adding 0.17%.

The pair was likely to find support at 78.75, the low of July 18 and resistance at 79.20, the high of July 16.

Market sentiment remained supported after European Central Bank President Mario Draghi unveiled on Thursday a new bond-purchasing program, dubbed Outright Monetary Transactions, which he said will provide "a fully effective backstop" against market volatility.

Under the terms of the plan, the ECB would buy unlimited amounts of government bonds of up to three years in maturity, as long as the country in question is signed up to the OMT program and agrees to economic reforms.

Separately, data showing that German industrial production rose far more-than-expected in July eased concerns over the effects of the euro zone's debt crisis on the region's strongest economy.

Meanwhile, investors were awaiting the release of a key U.S. employment report later Friday, after upbeat data on Thursday dampened expectations for near-term stimulus measures by the Federal Reserve.

Elsewhere, the yen was sharply lower against the euro with EUR/JPY climbing 0.76%, to hit 100.36.

Later in the day, the U.S. was to release a report on non-farm payrolls and the unemployment rate.


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