Investing.com - The dollar softened against the yen on Wednesday despite upbeat data out of the U.S., as concerns expressed in Japan over the impact of a weaker currency gave the Japanese currency support.
In U.S. trading, USD/JPY was down 0.06% at 108.83, up from a session low of 108.47 and off a high of 109.00.
The pair was expected to test support at 108.24, Tuesday's low, and resistance at 109.19, Monday's high.
The dollar has strengthened against the yen and most other major currencies in recent weeks as investors prep for monetary policy to become less accommodative in the U.S. at a time when Japan and other central banks are taking steps to loosen policy.
The yen, however, found support earlier after Japanese Prime Minister Shinzo Abe voiced concerns over the economic impact of recent weakness in the yen.
Prime Minister Abe reportedly said that the weaker yen had both positive and negative impacts and that he wanted to carefully watch the impact of yen weakness on regional economies and on small and mid-sized companies.
Upbeat U.S. data curbed the pair's losses.
The Census Bureau reported earlier that U.S. new home sales data rose 18.0% last month to 504,000 units, far surpassing expectations for a 4.4% gain to 430,000 units. New home sales for July were revised to a 1.9% increase from a previously estimated 2.4% drop.
The data came a day after a report showed that the U.S. manufacturing sector expanded in September close to market expectations and fueled already growing expectations that the Federal Reserve may hike interest rates sooner than markets have previously expected.
The yen, meanwhile, was up against the euro and up against the pound, with EUR/JPY down 0.48% at 139.22, and GBP/JPY trading down 0.29% at 177.96.
On Thursday, expect markets to move on U.S. durable goods orders and weekly jobless claims numbers.