Forexpros – The U.S. dollar fell to a two-month low against the yen on Monday, as renewed expectations for further easing measures by the Federal Reserve weighed on the greenback while last week’s monetary steps by the Bank of Japan supported the yen.
USD/JPY hit 80.08 during early European trade, the pair’s lowest since February 28; the pair subsequently consolidated at 80.12, retreating 0.19%.
The pair was likely to find support at 79.66, the low of February 22 and resistance at 80.46, the high of October 6.
The dollar weakened broadly after the U.S. Commerce Department said gross domestic product expanded at a rate of 2.2% in the three months to March, below expectations for a 2.5% increase.
The disappointing data fuelled speculation that the Fed may implement a fresh round of monetary stimulus measures after the central bank’s Governor Ben Bernanke left open the possibility following the bank’s monetary policy meeting last week, saying policymakers were “prepared to do more” if necessary.
Meanwhile, the yen remained supported after new easing measures announced by the BoJ fell short of some market expectations.
Following its monetary policy meeting on Thursday, the bank said it will increase the size of its asset purchase fund by JPY5 trillion, while a program to provide loans to banks was cut back by JPY5 trillion.
Economists had expected an increase of as much JPY10 trillion to the nation’s stimulus program.
The BoJ also kept interest rates on hold, in a widely expected decision.
Elsewhere, the yen also higher against the euro with EUR/JPY shedding 0.25%, to hit 106.13.
Later in the day, the U.S. was to publish official data on core personal consumption expenditures price inflation and on personal spending, followed by a report on business activity in Chicago.
Markets in Japan remained closed for the day due to a national holiday.
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