Forex - USD/JPY hits new record low after U.S. GDP data

Published 10/27/2011, 09:24 AM
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Investing.com - The U.S. dollar fell to a new record low against the yen on Thursday, after upbeat preliminary U.S. growth data and a European plan to tackle the region's debt crisis strongly boosted risk appetite.

USD/JPY hit 75.66 during European afternoon trade, the pair's all time low; the pair subsequently consolidated at 75.73, dropping 0.59%.

The pair was likely to find support at 74.80 and resistance at 76.31, Wednesday's high. 

Preliminary data showed that gross domestic product in the U.S. rose more-than-expected in the third quarter, expanding at the fastest rate since the third quarter of 2010.

The Bureau of Economic Analysis said that GDP rose by 2.5%, accelerating from growth of 1.3% in the preceding quarter. Analysts had expected U.S. gross domestic product to rise 2.4% in the third quarter.

The dollar weakened broadly earlier after European Union leaders reached an agreement on a package of measures designed to contain the debt crisis in the euro zone. 

Meanwhile, Japanese Finance Minister Jun Azumi reiterated that his country would take decisive action against excessive yen moves.

His comments came as the Bank of Japan announced additional monetary easing to help lower the yen. The central bank expanded its asset purchase program by JPY5 trillion to JPY55 trillion yen and kept the overnight lending rate at 0.1%.

Elsewhere, the yen was down against the euro with EUR/JPY jumping 1.03%, to trade at 107.03.

Also Thursday, the U.S. Department of Labor said the number of individuals filing for initial jobless benefits last week fell by 2,000 to 402,000, short of expectations for a decline to 400,000.

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