Investing.com – The U.S. dollar regained ground against the yen on Thursday, bouncing off a four-month low after Japan’s Finance Minister said the yen’s strength did not reflect economic fundamentals, fanning speculation that Japan would intervene to stem the currency’s gains.
USD/JPY clawed back up from 78.45, the pair’s lowest since May 17, to hit 79.07 during late Asian trade, gaining 0.11%.
The pair was likely to find support at 78.45, the day’s low and short-term resistance at 79.58, Wednesday’s high.
Finance Minister Noda said earlier that the yen’s “movement doesn't reflect fundamentals and has been one sided," regarding the yen's recent surge.
"It would be troublesome if it persists, and I will continue to closely watch markets," Noda added, while making no comment about possible intervention in the financial markets.
Japan's Chief Cabinet Secretary Yukio Edano said at a news conference earlier in the day that he was also closely watching currency moves, but that he was not in a position to comment on whether Japanese authorities had intervened in the market.
Meanwhile, the greenback was weighed after Moody’s Investors Service said late Wednesday that it placed the U.S. government’s Aaa bond rating on review for possible downgrade for the first time since 1995, citing “a small but rising risk” of a short-lived default, amid a standoff in the U.S. Congress over raising the country's USD14.3 trillion debt ceiling.
The rating would likely be reduced to the Aa range and there is no assurance Moody’s would return its top rating even if a default is quickly cured.
Federal Reserve Chairman Ben Bernanke said on Wednesday that the central bank was prepared to provide additional stimulus to bolster the U.S. economy, and warned a failure by Congress to raise the debt limit would send “shock waves” through the financial system.
Elsewhere, the yen was down against the euro, with EUR/JPY climbing 0.37% to hit 112.33.
Later in the day, the U.S. was to release a string of economic data, including a report on retail sales, producer price inflation, as well as weekly government data on initial jobless claims.
Also Thursday, Fed Chair Ben Bernanke was to deliver the second part of his testimony on monetary policy in Washington.
USD/JPY clawed back up from 78.45, the pair’s lowest since May 17, to hit 79.07 during late Asian trade, gaining 0.11%.
The pair was likely to find support at 78.45, the day’s low and short-term resistance at 79.58, Wednesday’s high.
Finance Minister Noda said earlier that the yen’s “movement doesn't reflect fundamentals and has been one sided," regarding the yen's recent surge.
"It would be troublesome if it persists, and I will continue to closely watch markets," Noda added, while making no comment about possible intervention in the financial markets.
Japan's Chief Cabinet Secretary Yukio Edano said at a news conference earlier in the day that he was also closely watching currency moves, but that he was not in a position to comment on whether Japanese authorities had intervened in the market.
Meanwhile, the greenback was weighed after Moody’s Investors Service said late Wednesday that it placed the U.S. government’s Aaa bond rating on review for possible downgrade for the first time since 1995, citing “a small but rising risk” of a short-lived default, amid a standoff in the U.S. Congress over raising the country's USD14.3 trillion debt ceiling.
The rating would likely be reduced to the Aa range and there is no assurance Moody’s would return its top rating even if a default is quickly cured.
Federal Reserve Chairman Ben Bernanke said on Wednesday that the central bank was prepared to provide additional stimulus to bolster the U.S. economy, and warned a failure by Congress to raise the debt limit would send “shock waves” through the financial system.
Elsewhere, the yen was down against the euro, with EUR/JPY climbing 0.37% to hit 112.33.
Later in the day, the U.S. was to release a string of economic data, including a report on retail sales, producer price inflation, as well as weekly government data on initial jobless claims.
Also Thursday, Fed Chair Ben Bernanke was to deliver the second part of his testimony on monetary policy in Washington.