Investing.com - The dollar fell against the yen on Wednesday amid a double shot of greenback profit taking and safe-haven demand for the Japanese currency due to Chinese growth concerns.
In U.S. trading, USD/JPY was down 0.95% at 118.53, up from a session low of 118.30 and off a high of 119.92.
The pair was expected to test support at 117.93, Tuesday's low, and resistance at 121.86, Monday's high.
The yen rose on jitters over the outlook for China’s economy after Beijing set new restrictions on collateral for short-term loans.
The move fueled fears that the China may grow less than anticipated, which fueled demand for safe-haven yen positions that came at the greenback's expense.
The yen often rises when Japanese stocks fall and growth-sensitive Australian and New Zealand dollars slide.
Still, the dollar's losses against the yen were seen as limited.
Last week’s strong U.S. jobs report for November prompted investors to bring forward expectations for the first hike in interest rates to mid-2015 from September 2015 ahead of the data.
The Labor Department reported Friday that the U.S. economy added 321,000 jobs in November, well past expectations for a 225,000 reading.
Investors were looking ahead to next week’s policy statement from the Fed amid speculation that policymakers could drop an assurance that interest rates will stay low for a "considerable time."
Separately, the yen was up against the euro and up against the pound, with EUR/JPY down 0.56% at 147.24, and GBP/JPY trading down 0.74% at 186.10.
On Thursday, the U.S. is to release data on retail sales, the government measure of consumer spending, as well as the weekly report on jobless claims.