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Forex - USD/JPY falls on Fed comments, growth worries
Published Sep 03, 2012 03:13AM ET
USD/JPY hit 78.20 during early European trade, the daily low; the pair subsequently consolidated at 78.30, falling 0.12%.
The pair was likely to find support at 78.03, the low of July 31 and resistance at 78.63, the high of August 10.
The greenback remained under pressure after Fed Chairman Ben Bernanke said on Friday that the bank would act as needed to strengthen the U.S. economic recovery, but he stopped short of indicating that a fresh round of stimulus is imminent.
Speaking at the Fed’s annual symposium in Jackson Hole, Wyoming, Bernanke said the persistently high rate of unemployment was a “grave concern” and added that the bank’s easing program had been effective in providing “meaningful support" to the recovery.
Meanwhile, market sentiment was hit by fresh concerns over China’s outlook for growth, after data earlier showed that manufacturing activity in the world’s second largest economy contracted in August.
China’s HSBC Flash Purchasing Managers Index, the earliest indicator of the country's industrial activity, fell to a 41-month low of 47.6 in August from a preliminary reading of 47.8, as new orders slumped in the face of weakening global demand.
In Japan, government data showed earlier that capital spending rose less than expected in the second quarter, rising 7.7% after a 3.3% increase in the previous quarter.
Analysts had expected capital spending to increase by 8.9% in the second quarter.
The yen was higher against the euro with EUR/JPY edging down 0.09%, to hit 98.49.
Trade looked likely to remain subdued on Monday, with no significant economic data releases on the calendar, while markets in the U.S. were to remain closed for the Labor Day holiday.
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