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Forex - USD/JPY slides on Fed easing expectations

Published 08/31/2011, 03:38 AM
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EUR/JPY
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Investing.com – The U.S. dollar slid lower against the yen on Wednesday, after the minutes of the Federal Reserve's August meeting added to expectations for more stimulus by the central bank, while month end yen buying by Japanese exporters lifted the currency.

USD/JPY hit 76.54 during late Asian trade, the daily low; the pair subsequently consolidated at 76.56, shedding 0.21%.

The pair was likely to find support at 76.29, the low of August 11 and resistance at 77.20, the high of August 22.

The minutes of the Fed’s August policy-setting meeting, released Tuesday, showed that some policymakers pressed for more aggressive measures to stimulate growth, including buying more government bonds.

This added to speculation that the Fed may act after its extended two-day meeting in September.

In Japan, preliminary data showed that industrial production rose less-than-expected in July, rising at the slowest pace since March, indicating that the post-earthquake rebound may be tapering out.

The Trade Ministry said industrial production rose by 0.6%, after rising by 3.8% in June. Analysts had expected an increase of 1.6%.

The yen was also higher against the euro, with EUR/JPY shedding 0.26% to hit 110.54.

Later in the day, payroll processing firm ADP was to release a report on U.S. non-farm payrolls. The U.S. was also to publish data on manufacturing activity in the Chicago area and factory orders.

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