Investing.com - The U.S. dollar held steady against the yen on Tuesday, hovering at two-week highs and within close distance of a seven-year peak as expectations for a U.S. rate hike in 2015 continued to support demand for the greenback.
Trading volumes were expected to remain light this week with many investors away for the Christmas holiday and ahead of the New Year's holiday.
USD/JPY hit 120.19 during European afternoon trade, the pair's highest since December 9; the pair subsequently consolidated at 120.14.
The pair was likely to find support at 118.80, the low of December 19 and resistance at 121.00, the high of December 9.
The dollar remained broadly supported after the Federal Reserve signaled last week that it was on track to raise interest rates next year but said it was taking a patient stance.
The central bank also acknowledged the improvement in the U.S. labor market and noted that the economy is making progress toward its goals in inflation and employment.
The yen shrugged off the Bank of Japan's Monthly Report on Recent Economic and Financial Developments, released on Monday, saying that the country's economy has continued to recover moderately, as the effects of the decline in demand following the sales tax hike have been subsiding.
Elsewhere, the yen was little changed against the euro, with EUR/JPY at 146.76.
In the euro zone, official data earlier showed that French consumer spending rose 0.4% in November, beating expectations for a 0.3% gain. French consumer spending fell 0.8% in October, whose figure was revised from a previously estimated 0.9% decline.
Another report showed that France's economy grew by 0.3% in the third quarter, in line with expectations and unchanged from the previous quarter's growth rate.
Later in the day, the U.S. was to release final third-quarter GDP data, as well as on core durable goods orders and new home sales.