Investing.com - The dollar slid against its Japanese counterpart on Tuesday after a disappointing report on U.S. consumer confidence sparked a round of greenback profit taking, while somewhat hawkish minutes from the Bank of Japan's most recent meeting supported the yen.
In U.S. trading, USD/JPY was down 0.25% at 117.98, up from a session low of 117.69 and off a high of 118.57.
The pair was expected to test support at 117.33, Friday's low, and resistance at 118.57, Monday's high.
The Conference Board market research group reported earlier that consumer confidence index fell to 88.7 this month from a 94.1 in October, whose figure was revised down from a previously reported 94.5.
Analysts expected the index to increase to 95.9 in November, and the surprise deterioration sent investors selling the greenback for profits, wiping out recent gains stemming from preparations for U.S. monetary policy to diverge from Europe and Asia.
The Present Situation Index declined from 94.4 to 91.3, while the Expectations Index decreased sharply to 87.0 from 93.8 in October.
Commenting on the report, director of The Conference Board Consumer Research Center Lynn Franco said, “Consumers were somewhat less positive about current business conditions and the present state of the job market; moreover, their optimism in the short-term outlook in both areas has waned."
Earlier Tuesday, the Commerce Department reported that U.S. gross domestic product grew at a seasonally adjusted annual rate of 3.9% in the third quarter, topping expectations for a reading of 3.3%.
Preliminary data initially pegged U.S. growth at 3.5% in the third quarter. The U.S. economy expanded by 4.6% in the preceding quarter.
The data showed personal consumption rose 2.2% in the third quarter, beating expectations for a 1.9% gain and up from a preliminary estimate of 1.8%.
Consumer spending typically accounts for nearly 70% of U.S. economic growth.
Tuesday's mixed data sent the greenback falling on profit taking.
The dollar has rallied in recent weeks on expectations for U.S. monetary policy to grow less accommodative while European and Asian central banks move in the opposite direction.
The yen found some support after Bank of Japan Governor Haruhiko Kuroda voiced concerns over the economic impact of the weaker yen earlier Tuesday.
The currency received an additional boost after the minutes of the BoJ’s October meeting showed that some officials opposed plans to expand its stimulus program.
Separately, the yen was up against the euro and up against the pound, with EUR/JPY down 0.10% at 147.02, and GBP/JPY trading down 0.24% at 185.34.
On Wednesday, the U.S. is to release a flurry of data ahead of Thursday’s holiday, including reports on durable goods orders, unemployment claims, personal income and spending, as well as reports on new and pending home sales and revised data on consumer sentiment.