Forex - USD/JPY hits six-day high on upbeat U.S. economic outlook

Published 03/28/2011, 06:48 AM
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Investing.com – The U.S. dollar was up for a third day against the yen on Monday, climbing to a six-day high as investors continued to monitor the country’s nuclear crisis and amid indications the U.S. economic recovery was gathering pace.

USD/JPY hit 81.84 during European morning trade, the pair’s highest since March 18; the pair subsequently consolidated at 81.73, climbing 0.47%.

The pair was likely to find support at 80.86, Friday’s low and resistance at 82.04, the high of March 15.

Earlier in the day, Japan’s nuclear safety agency said radiation levels in water in the stricken Fukushima Daiichi No. 2 reactor building were measured at more than 1,000 millisieverts per hour, while locals within a 20 kilometer evacuation zone were asked not to return to the area by officials.

Meanwhile, the greenback was boosted by hawkish comments from regional Federal Reserve officials.

Philadelphia Federal Reserve Bank President Charles Plosser said on Friday the U.S. central bank would have to reverse its easy money policy in the "not-too-distant future" to avoid sowing the seeds of inflation.

Plosser's comments were followed by St. Louis Fed President James Bullard, who said on Saturday that lengthening the 'extended period' of low rates could encourage a liquidity trap.

The U.S. Bureau of Economic Analysis said on Friday that fourth quarter gross domestic product came in stronger-than-expected, rising at an inflation-adjusted annual rate of 3.1%, more than the expected 2.9% gain.

Elsewhere, the yen was also down against the euro, with EUR/JPY adding 0.19% to hit 114.79.

Later in the day, the U.S. was to release industry data on pending home sales as well as official data on personal spending, personal income and personal consumption expenditures.

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