Investing.com - The dollar dropped against the yen on Tuesday after investors sold the greenback for profits earned on a better-than-expected U.S. factory barometer, while the yen saw demand from bottom fishers looking past dovish comments out of the Bank of Japan.
In U.S. trading on Tuesday, USD/JPY was trading at 102.37, down 0.56%, up from a session low of 102.23 and off a high of 103.38.
The pair was likely to find support at 102.23, the earlier low, and resistance at 103.73, the high from May 22.
The dollar shot up on Monday after the Institute for Supply Management reported that U.S. manufacturing activity in November expanded at its fastest pace since April of 2011, fueling hopes that U.S. recovery is showing marked improvement.
The ISM manufacturing purchasing managers’ index rose to 57.3 in November from 56.4 in October.
Analysts were expecting the index to fall to 55.0, and the surprise uptick sparked demand for the dollar by stoking market expectations for the Federal Reserve to begin scaling back its monthly asset-purchasing program in early 2014.
Fed bond purchases, currently running at USD85 billion a month, tend to keep the dollar weak by driving down long-term interest rates to spur recovery, and talk of their dismantling often strengthens the greenback.
The dollar, however, traded lower on Tuesday as investors also awaited the release of the November jobs report on Friday, which could provide clues as to when the Fed will announce plans to taper asset purchases.
Monetary authorities have said they will pay close attention to economic indicators before deciding when to wind down stimulus programs.
Meanwhile the yen saw demand from bargain hunters after dropping on expectations for the Bank of Japan to beef up stimulus programs to meet its 2% inflation target by 2015.
On Monday, BoJ Governor Haruhiko Kuroda pledged to counter any new downside risks to the bank’s inflation goal, saying the BoJ would act by "adjusting monetary policy without hesitation."
The yen was up against the pound and up against the euro, with GBP/JPY down 0.22% and trading at 168.00 and EUR/JPY trading down 0.10% at 139.26.
On Wednesday, the U.S. is to release the ADP report on private-sector job creation, while the Institute of Supply Management is to release its service-sector purchasing managers' index. The U.S is also to publish data on new home sales and data on its trade balance.
In U.S. trading on Tuesday, USD/JPY was trading at 102.37, down 0.56%, up from a session low of 102.23 and off a high of 103.38.
The pair was likely to find support at 102.23, the earlier low, and resistance at 103.73, the high from May 22.
The dollar shot up on Monday after the Institute for Supply Management reported that U.S. manufacturing activity in November expanded at its fastest pace since April of 2011, fueling hopes that U.S. recovery is showing marked improvement.
The ISM manufacturing purchasing managers’ index rose to 57.3 in November from 56.4 in October.
Analysts were expecting the index to fall to 55.0, and the surprise uptick sparked demand for the dollar by stoking market expectations for the Federal Reserve to begin scaling back its monthly asset-purchasing program in early 2014.
Fed bond purchases, currently running at USD85 billion a month, tend to keep the dollar weak by driving down long-term interest rates to spur recovery, and talk of their dismantling often strengthens the greenback.
The dollar, however, traded lower on Tuesday as investors also awaited the release of the November jobs report on Friday, which could provide clues as to when the Fed will announce plans to taper asset purchases.
Monetary authorities have said they will pay close attention to economic indicators before deciding when to wind down stimulus programs.
Meanwhile the yen saw demand from bargain hunters after dropping on expectations for the Bank of Japan to beef up stimulus programs to meet its 2% inflation target by 2015.
On Monday, BoJ Governor Haruhiko Kuroda pledged to counter any new downside risks to the bank’s inflation goal, saying the BoJ would act by "adjusting monetary policy without hesitation."
The yen was up against the pound and up against the euro, with GBP/JPY down 0.22% and trading at 168.00 and EUR/JPY trading down 0.10% at 139.26.
On Wednesday, the U.S. is to release the ADP report on private-sector job creation, while the Institute of Supply Management is to release its service-sector purchasing managers' index. The U.S is also to publish data on new home sales and data on its trade balance.