Investing.com - The U.S. dollar rallied to a one-month high against the yen on Wednesday, as Japanese trade deficit data weighed on demand for the yen while investors eyed the Federal Reserve’s rate statement later in the day.
USD/JPY hit 77.98 during late Asian trade, the pair’s highest since December 29; the pair subsequently consolidated at 77.92, rising 0.32%.
The pair was likely to find support at 77.56, the low of December 28 and resistance at 78.21, the high of December 23.
Government data showed earlier that Japan’s trade deficit widened unexpectedly in December, marking the country’s first annual trade deficit since 1980.
Japan’s Finance Ministry said that the country’s trade deficit widened to JPY0.57 trillion from a deficit of JPY0.53 trillion in November. Analysts had expected a JPY0.36 trillion surplus in December.
Also Wednesday, the Bank of Japan said in its monthly report that the country's exports are likely to increase moderately going forward, as recovery in overseas economies gathers pace.
However, exports and production will remain more or less flat for the time being, according to the report.
On Tuesday, the BoJ trimmed the growth outlook for the economy citing slowdown in overseas economies and a strong yen.
Elsewhere, the yen fell to a one-month low against the euro with EUR/JPY adding 0.36%, to hit 101.62.
The Fed was to announce the federal funds rate and publish its official rate statement later Wednesday. The U.S. was also to release industry data on pending home sales, followed by official data on crude oil stockpiles.
Meanwhile, the World Economic Forum was to begin its five-day annual meeting in Davos in Switzerland.
USD/JPY hit 77.98 during late Asian trade, the pair’s highest since December 29; the pair subsequently consolidated at 77.92, rising 0.32%.
The pair was likely to find support at 77.56, the low of December 28 and resistance at 78.21, the high of December 23.
Government data showed earlier that Japan’s trade deficit widened unexpectedly in December, marking the country’s first annual trade deficit since 1980.
Japan’s Finance Ministry said that the country’s trade deficit widened to JPY0.57 trillion from a deficit of JPY0.53 trillion in November. Analysts had expected a JPY0.36 trillion surplus in December.
Also Wednesday, the Bank of Japan said in its monthly report that the country's exports are likely to increase moderately going forward, as recovery in overseas economies gathers pace.
However, exports and production will remain more or less flat for the time being, according to the report.
On Tuesday, the BoJ trimmed the growth outlook for the economy citing slowdown in overseas economies and a strong yen.
Elsewhere, the yen fell to a one-month low against the euro with EUR/JPY adding 0.36%, to hit 101.62.
The Fed was to announce the federal funds rate and publish its official rate statement later Wednesday. The U.S. was also to release industry data on pending home sales, followed by official data on crude oil stockpiles.
Meanwhile, the World Economic Forum was to begin its five-day annual meeting in Davos in Switzerland.