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Forex - USD/JPY up as Fed action seen boosting dollar

Published 06/24/2013, 09:57 PM
Updated 06/24/2013, 09:58 PM

Investing.com - The U.S. dollar traded higher against the Japanese yen Tuesday in Asia as traders continue to expect the end of U.S. monetary easing will boost the greenback against its major rivals.

In Asian trading Tuesday, USD/JPY rose 0.24% to 97.98 after earlier trading as high as 98.08. The pair is likely to find support at 96.85, Friday’s low and resistance at 99.45, the high of June 6.

In U.S. economic news out Monday, the Federal Reserve Bank of Philadelphia said late last week that its manufacturing index rose to 12.5 in June from -5.2 in May, well above expectations for a -2.0 reading.

A separate report showed that U.S. existing home sales climbed 4.2% to 5.18 million units in May from April’s total of 4.97 million, far surpassing market calls for a 0.6% increase.

Solid data points such as those stoke speculation that the U.S. economy, the world’s largest, is improving at such a clip that the Fed can start trimming its USD85 billion-a-month bond-buying activities in the near-term. Traders widely expect the Fed to cease easing in 2014.

Earlier Tuesday, the Bank Of Japan said that Japan’s corporate services price index rose by a seasonally-adjusted 0.3% last month following a -0.3% reading in April. Analysts had expected Japan’s CSPI to rise to 0.1% last month. The April reading was revised up from -0.4%.

USD/JPY got a lift Monday after BoJ Deputy Governor Kikuo Iwata said the central bank can still deploy easing measures if it has to.

Elsewhere, EUR/JPY rose 0.26% to 128.57 while AUD/JPY added 0.37% to 90.74. NZD/JPY advanced 0.33% to 76.04.


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