Investing.com - The U.S. dollar traded higher against the Japanese yen during Tuesday’s Asian session as traders looked to the start of the Federal Reserve’s two-day meeting later Tuesday.
In Asian trading Tuesday, USD/JPY rose 0.22% to 99.29. The pair was likely to find support at 98.50, the earlier low, and resistance at 99.97, Friday's high.
Traders have been avoiding the greenback to some degree on uncertainty as to whether the U.S. central bank will announce plans to begin tapering its USD85 billion monthly bond-buying program, which weakens the dollar by driving down interest rates to spur recovery.
However, most market participants believe this will be the meeting where the Fed finally makes a formal tapering announcement. The most frequently cited number is that the Fed will trim USD10 billion from its USD85 billion-per-month bond-buying program.
Dollar rivals gained during Monday’s Asian session on news that former U.S. Treasury Secretary Larry Summers will not be the next Federal Reserve chairman. Summers is viewed as a monetary policy hawk and some traders believed that if tapering started before he became Fed chair, he would ramp up tapering when he took control of the central bank.
Fed Vice Chairwoman Janet Yellen, who is dovish, is believed to be next in line to succeed Ben Bernanke. Bernanke, who has overseen multiple rounds of quantitative easing, retires in January.
In U.S. economic news out Monday, a report from the Federal Reserve today showed U.S. industrial production rose 0.4% last month after a flat reading in July. The August increase was the biggest in six months. Housing and automobile production paced the gains.
The New York Federal Reserve’s Empire State Manufacturing survey fell to 6.29 from 8.24 in August. Economists expected a reading of 9.20. The new orders index rose to 2.35 from 0.27 while shipments soared to 16.43, the highest level in more than a year, from 1.47. Readings above zero indicate expansion.
Elsewhere, AUD/JPY inched up 0.04% to 92.37 while EUR/JPY added 0.16% to 132.32.
In Asian trading Tuesday, USD/JPY rose 0.22% to 99.29. The pair was likely to find support at 98.50, the earlier low, and resistance at 99.97, Friday's high.
Traders have been avoiding the greenback to some degree on uncertainty as to whether the U.S. central bank will announce plans to begin tapering its USD85 billion monthly bond-buying program, which weakens the dollar by driving down interest rates to spur recovery.
However, most market participants believe this will be the meeting where the Fed finally makes a formal tapering announcement. The most frequently cited number is that the Fed will trim USD10 billion from its USD85 billion-per-month bond-buying program.
Dollar rivals gained during Monday’s Asian session on news that former U.S. Treasury Secretary Larry Summers will not be the next Federal Reserve chairman. Summers is viewed as a monetary policy hawk and some traders believed that if tapering started before he became Fed chair, he would ramp up tapering when he took control of the central bank.
Fed Vice Chairwoman Janet Yellen, who is dovish, is believed to be next in line to succeed Ben Bernanke. Bernanke, who has overseen multiple rounds of quantitative easing, retires in January.
In U.S. economic news out Monday, a report from the Federal Reserve today showed U.S. industrial production rose 0.4% last month after a flat reading in July. The August increase was the biggest in six months. Housing and automobile production paced the gains.
The New York Federal Reserve’s Empire State Manufacturing survey fell to 6.29 from 8.24 in August. Economists expected a reading of 9.20. The new orders index rose to 2.35 from 0.27 while shipments soared to 16.43, the highest level in more than a year, from 1.47. Readings above zero indicate expansion.
Elsewhere, AUD/JPY inched up 0.04% to 92.37 while EUR/JPY added 0.16% to 132.32.