Investing.com - The U.S. dollar trimmed gains against the yen on Tuesday after data showed that U.S. orders for long lasting manufactured goods unexpectedly slumped in December, casting doubts over the economic outlook.
USD/JPY was last up just 0.12% to 102.67, down from session highs of 103.25.
The pair is likely to find support at 102.00 and resistance at 103.30.
Durable goods orders tumbled 4.3% last month the Commerce Department said, confounding expectations for a 1.8% gain. Orders for durable goods in November were revised to a 2.6% increase from a previously reported gain of 3.4%.
Core durable goods orders, excluding volatile transportation items, fell1.6% in December, the largest drop since March, compared to forecasts for a 0.5% increase.
Orders for core capital goods, a key barometer of private-sector business investment, fell 1.3% last month, confounding expectations for a 0.5% gain and after rising 2.6% in November.
The unexpectedly poor data did little to alter expectations that the Federal Reserve will continue to reduce stimulus measures.
Investors were anticipating Wednesday’s policy statement by the Fed amid expectations that the bank will cut its asset purchase program by another $10 billion, to $75 billion per month. The central bank announced the first cut to its stimulus program in December.
Concerns over the impact of the Fed tapering stimulus, along with fears over a possible slowdown in China fuelled a broad based selloff in emerging currencies in recent sessions, sending the yen to seven-week highs against the dollar on Monday.
Sentiment on emerging market currencies remained fragile ahead of an emergency meeting of Turkey’s central bank later Tuesday. Turkey’s lira spiraled to new lows against the dollar on Monday, sparking widespread risk aversion.
Elsewhere, the dollar gave up gains against the euro, with EUR/USD pulling back from session lows of 1.3629 to trade at 1.3672, just 0.01% lower for the day. The dollar turned lower against the pound, with GBP/USD rising 0.13% to 1.6605.
Earlier Tuesday, preliminary data showed that the U.K. economy grew in line with expectations in the fourth quarter.
The U.K. economy grew 0.7% in the final three months of 2013, slightly down from growth of 0.8% in the previous quarter, and expanded 2.8% from a year earlier.
On an annual basis, U.K. gross domestic product grew 1.9% in 2013, up from just 0.3% the previous year, the fastest annual rate of growth since 2007.