Investing.com - The dollar traded lower against the yen on Wednesday as expectations grew the Fed will seek to spur recovery via monetary easing tools.
Sentiment the Bank of Japan will hold off on easing measures further sent the pair falling.
In Asian trading on Wednesday, USD/JPY hit 78.52 down 0.10%, up from a session low of 78.50 and off a high of 78.64.
The pair was likely to find support at 78.16, the low from Aug. 7, and resistance at 78.74, the high of Aug. 7.
The Bank of Japan is currently holding a monetary policy meeting and is due to announce its decision on interest rates on Thursday, and the bank may hold off on plans to loosen policy.
Meanwhile, the Federal Reserve has not ruled out jolting the economy via a round of purchasing bonds from banks, a monetary stimulus tool known as quantitative easing, which weakens the dollar to spur more recovery.
Earlier, Federal Reserve Bank of Boston President Eric S. Rosengren said the economy merited more easing, adding unlike in past rounds, the Fed should leave the program open ended.
Past rounds were announced with a previously determined amount of assets to be bought by the Fed.
Meanwhile, Federal Reserve Chairman Ben Bernanke said earlier rates will have to stay low due to the fragile shape of the economy, which fueled demand for the yen.
In Europe, expectations began to build that the European Central Bank will take steps to lower borrowing costs in Spain and Italy by buying their bonds in the open market.
Such sentiment fueled demand for risk, namely Asian equities.
The yen was up against the pound and up against the euro, with GBP/JPY down 0.11% and trading at 122.65 and EUR/JPY down 0.11% and trading at 97.35.
Later Wednesday, Japan will release official data on the current account, while the U.S. will release government data on labor costs and productivity levels, leading indicators of consumer inflation.
Sentiment the Bank of Japan will hold off on easing measures further sent the pair falling.
In Asian trading on Wednesday, USD/JPY hit 78.52 down 0.10%, up from a session low of 78.50 and off a high of 78.64.
The pair was likely to find support at 78.16, the low from Aug. 7, and resistance at 78.74, the high of Aug. 7.
The Bank of Japan is currently holding a monetary policy meeting and is due to announce its decision on interest rates on Thursday, and the bank may hold off on plans to loosen policy.
Meanwhile, the Federal Reserve has not ruled out jolting the economy via a round of purchasing bonds from banks, a monetary stimulus tool known as quantitative easing, which weakens the dollar to spur more recovery.
Earlier, Federal Reserve Bank of Boston President Eric S. Rosengren said the economy merited more easing, adding unlike in past rounds, the Fed should leave the program open ended.
Past rounds were announced with a previously determined amount of assets to be bought by the Fed.
Meanwhile, Federal Reserve Chairman Ben Bernanke said earlier rates will have to stay low due to the fragile shape of the economy, which fueled demand for the yen.
In Europe, expectations began to build that the European Central Bank will take steps to lower borrowing costs in Spain and Italy by buying their bonds in the open market.
Such sentiment fueled demand for risk, namely Asian equities.
The yen was up against the pound and up against the euro, with GBP/JPY down 0.11% and trading at 122.65 and EUR/JPY down 0.11% and trading at 97.35.
Later Wednesday, Japan will release official data on the current account, while the U.S. will release government data on labor costs and productivity levels, leading indicators of consumer inflation.