Forex - USD/JPY drops on profit-taking, eyes on euro zone

Published 10/08/2012, 04:09 AM
Updated 10/08/2012, 04:10 AM
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Investing.com - The U.S. dollar was lower against the yen on Monday, as investors locked in profits after strong U.S. employment data sent the greenback to a two-week high against the safe haven yen, while markets continued to eye developments in the euro zone.

USD/JPY hit 78.25 during European morning trade, the pair's lowest since October 3; the pair subsequently consolidated at 78.33, declining 0.42%.

The pair was likely to find support at 78.12, the low of October 3 and resistance at 78.76, the session high.

The greenback strengthened against the yen on Friday after data showed that the U.S. unemployment rate unexpectedly dropped to its lowest level in nearly four years.

The U.S. Department of Labor said the economy added 114,000 jobs in September, pushing the unemployment rate down to 7.8% from 8.1% the previous month, the lowest level since January 2009.

The report came after upbeat U.S. data on manufacturing and services earlier in the week and fuelled hopes that the economic recovery may be gaining momentum.

Meanwhile, investors eyed a meeting of European finance ministers in Luxembourg later in the day to discuss Spain's debt woes and closer banking cooperation.

On Tuesday, German Chancelor Angela Merkel was to make her first trip to Greece since July 2007 on Tuesday.

The yen was sharply higher against the euro with EUR/JPY tumbling 0.90%, to hit 101.65.

Trading volumes were expected to be light on Monday, as markets in Japan and the U.S. were to remain closed for national holidays.


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