Investing.com - The dollar extended Tuesday's losses against the yen on Wednesday as investors continued to snap up nicely priced yen positions after Japanese Economy Minister Akira Amari warned that allowing the yen to weaken too much could harm the broader economy.
In U.S. trading on Wednesday, USD/JPY was trading at 88.57, down 0.25%, up from a session low of 87.80 and off a high of 88.88.
The pair was likely to find support at 86.84, the low from Jan. 8, and resistance at 89.63, Tuesday's high.
The yen has weakened close to 6% in roughly a month due to dovish comments made by Japanese Prime Minister Shinzo Abe, who has sought to double the country's inflation target to 2% and has added that he will name a Bank of Japan chief who supports his calls for looser monetary policies.
Current Bank of Japan Governor Masaaki Shirakawa's term ends in April, and sentiments that a replacement will favor Abe's calls for looser policies and greater tolerance for inflation as part of more pro-growth, less austere policies have weakened the pair in recent weeks.
The yen, however, has rebounded against the dollar in a multi-session rally after Amari expressed concerns in public that imports and the overall economy could suffer if the yen slides too far.
Elsewhere in the U.S., official data revealed that the country's monthly consumer price index came in flat in December, in line with expectations, after contracting 0.3% in November.
The country's monthly core consumer price index, stripped of volatile food and energy prices, grew 0.1% in December, missing expectations for a gain of 0.2%.
A separate report showed that U.S. industrial production rose 0.3% last month, also in line with expectations.
The yen, meanwhile was up against the pound and up against the euro, with GBP/JPY down 0.52% and trading at 141.89 and EUR/JPY trading down 0.18% at 117.92.
On Thursday, Japan is release official data on tertiary industry activity, a leading indicator of economic activity.
The U.S., meanwhile, will produce official data on building permits and housing starts, which will provide a glimpse into the country's housing and construction health.
The U.S. is also to release the weekly government report on initial jobless claims and data on manufacturing activity in Philadelphia.
In U.S. trading on Wednesday, USD/JPY was trading at 88.57, down 0.25%, up from a session low of 87.80 and off a high of 88.88.
The pair was likely to find support at 86.84, the low from Jan. 8, and resistance at 89.63, Tuesday's high.
The yen has weakened close to 6% in roughly a month due to dovish comments made by Japanese Prime Minister Shinzo Abe, who has sought to double the country's inflation target to 2% and has added that he will name a Bank of Japan chief who supports his calls for looser monetary policies.
Current Bank of Japan Governor Masaaki Shirakawa's term ends in April, and sentiments that a replacement will favor Abe's calls for looser policies and greater tolerance for inflation as part of more pro-growth, less austere policies have weakened the pair in recent weeks.
The yen, however, has rebounded against the dollar in a multi-session rally after Amari expressed concerns in public that imports and the overall economy could suffer if the yen slides too far.
Elsewhere in the U.S., official data revealed that the country's monthly consumer price index came in flat in December, in line with expectations, after contracting 0.3% in November.
The country's monthly core consumer price index, stripped of volatile food and energy prices, grew 0.1% in December, missing expectations for a gain of 0.2%.
A separate report showed that U.S. industrial production rose 0.3% last month, also in line with expectations.
The yen, meanwhile was up against the pound and up against the euro, with GBP/JPY down 0.52% and trading at 141.89 and EUR/JPY trading down 0.18% at 117.92.
On Thursday, Japan is release official data on tertiary industry activity, a leading indicator of economic activity.
The U.S., meanwhile, will produce official data on building permits and housing starts, which will provide a glimpse into the country's housing and construction health.
The U.S. is also to release the weekly government report on initial jobless claims and data on manufacturing activity in Philadelphia.