Investing.com - The U.S. dollar rose to a two-day high against the yen on Tuesday, as hopes for fresh action by the European Central Bank supported market sentiment, ahead of the central bank’s policy meeting later in the week.
USD/JPY hit 78.43 during early European trade, the pair’s highest since August 31; the pair subsequently consolidated at 78.42, adding 0.21%.
The pair was likely to find support at 78.15, the low of August 10 and resistance at 78.65, the high of August 8.
Market sentiment improved after ECB President Mario Draghi indicated on Monday that he would be comfortable buying bonds with maturities of up to about three years, saying that it would not constitute state financing.
At its policy meeting on Thursday, the ECB is expected to announce the details of a long awaited debt-buying program designed to help ease funding pressures for indebted euro zone countries.
Investors remained cautious however, after Moody’s rating agency put the European Union’s AAA credit rating on negative outlook, saying that its decision is in line with projections for the main budget contributors to the EU.
Germany, the Netherlands, France and the U.K. are all already on negative outlook.
But the greenback’s gains were limited after Federal Reserve Chairman Ben Bernanke said Friday that the Fed would act as needed to strengthen the U.S. economic recovery, but he stopped short of indicating that a fresh round of stimulus is imminent.
In Japan, government data showed earlier that average cash earnings fell far more-than-expected in July, dropping 1.2% after a revised 0.4% decline the previous month.
Analysts had expected average cash earnings to fall 0.3% in July.
Elsewhere, the yen was lower against the euro with EUR/JPY rising 0.38%, to hit 98.92.
Later in the day, the Institute for Supply Management was to release a report on U.S. manufacturing activity.
USD/JPY hit 78.43 during early European trade, the pair’s highest since August 31; the pair subsequently consolidated at 78.42, adding 0.21%.
The pair was likely to find support at 78.15, the low of August 10 and resistance at 78.65, the high of August 8.
Market sentiment improved after ECB President Mario Draghi indicated on Monday that he would be comfortable buying bonds with maturities of up to about three years, saying that it would not constitute state financing.
At its policy meeting on Thursday, the ECB is expected to announce the details of a long awaited debt-buying program designed to help ease funding pressures for indebted euro zone countries.
Investors remained cautious however, after Moody’s rating agency put the European Union’s AAA credit rating on negative outlook, saying that its decision is in line with projections for the main budget contributors to the EU.
Germany, the Netherlands, France and the U.K. are all already on negative outlook.
But the greenback’s gains were limited after Federal Reserve Chairman Ben Bernanke said Friday that the Fed would act as needed to strengthen the U.S. economic recovery, but he stopped short of indicating that a fresh round of stimulus is imminent.
In Japan, government data showed earlier that average cash earnings fell far more-than-expected in July, dropping 1.2% after a revised 0.4% decline the previous month.
Analysts had expected average cash earnings to fall 0.3% in July.
Elsewhere, the yen was lower against the euro with EUR/JPY rising 0.38%, to hit 98.92.
Later in the day, the Institute for Supply Management was to release a report on U.S. manufacturing activity.