Investing.com - The U.S. dollar traded lower against the Japanese yen during Tuesday’s Asian session as the Federal Reserve is seen as sending mixed messages about its intentions to taper its USD85 billion-a-month bond-buying program.
In Asian trading Tuesday, USD/JPY fell 0.06% to 98.80 after earlier trading as low as 98.67. The pair was likely to find support at 97.77, Wednesday's low, and resistance at 99.67, Friday's high.
The Federal Reserve last week made no changes to its USD85 billion monthly bond-buying program, which weakens the dollar to spur recovery.
Many market participants were expecting the U.S. central bank to trim the total by USD10 billion or more now that the economy is gaining steam.
On Monday, Federal Reserve Bank of New York President William Dudley said the stimulus program would stay in place until data show that recovery will be sustained.
"Our decisions on how to adjust our policy tools—for example, the pace of asset purchases and forward guidance with respect to the level of short-term rates—must be rooted in the ongoing flow of information that informs our judgments about the prospects for a sustainable recovery," said Dudley.
Dudley’s comments conflict with those made by last Friday by St. Louis Fed President James Bullard who said Friday the decision not to taper in September was “close” and indicated that there could be a small reduction in bond purchases in October.
In times of uncertainty, investors prefer safe-haven plays, of which the yen is one. Lingering uncertainty about the future of tapering could force the dollar lower against the yen, a scenario yen bears do not favor.
Elsewhere, EUR/JPY inched down 0.05% to 133.34 while AUD/JPY fell 0.28% to 92.99.
In Asian trading Tuesday, USD/JPY fell 0.06% to 98.80 after earlier trading as low as 98.67. The pair was likely to find support at 97.77, Wednesday's low, and resistance at 99.67, Friday's high.
The Federal Reserve last week made no changes to its USD85 billion monthly bond-buying program, which weakens the dollar to spur recovery.
Many market participants were expecting the U.S. central bank to trim the total by USD10 billion or more now that the economy is gaining steam.
On Monday, Federal Reserve Bank of New York President William Dudley said the stimulus program would stay in place until data show that recovery will be sustained.
"Our decisions on how to adjust our policy tools—for example, the pace of asset purchases and forward guidance with respect to the level of short-term rates—must be rooted in the ongoing flow of information that informs our judgments about the prospects for a sustainable recovery," said Dudley.
Dudley’s comments conflict with those made by last Friday by St. Louis Fed President James Bullard who said Friday the decision not to taper in September was “close” and indicated that there could be a small reduction in bond purchases in October.
In times of uncertainty, investors prefer safe-haven plays, of which the yen is one. Lingering uncertainty about the future of tapering could force the dollar lower against the yen, a scenario yen bears do not favor.
Elsewhere, EUR/JPY inched down 0.05% to 133.34 while AUD/JPY fell 0.28% to 92.99.