Forexpros – The U.S. dollar slipped lower against the yen on Tuesday, as fears over the escalating crisis in the euro zone bolstered safe haven demand but concerns over the risk of a yen-weakening intervention by Japan limited the dollar’s losses.
USD/JPY hit 78.21 during late Asian trade, the session low; the pair subsequently consolidated at 78.25, shedding 0.18%.
The pair was likely to find support at 77.65, the low of June 1 and resistance at 78.52, Monday’s high.
Demand for the traditional safe-haven yen remained supported after rating’s agency Moody’s cut its outlook on Germany to negative from stable overnight.
Investors also remained fearful that Spain will be the next euro zone member to require a full-scale bailout after two regional authorities requested financial assistance from Madrid over the weekend.
But the yen remained supported after Japanese Finance Minister Jun Azumi said Tuesday that Tokyo was ready to take decisive action against speculative moves or excessive volatility in the yen, in order to shield the largely export based economy from the effects of the currency’s strength.
The yen was hovering close to a 12-year high against the euro, with EUR/JPY slipping 0.14% to 94.86.
Later in the day, the U.S. was also to release preliminary data on manufacturing activity, while Federal Reserve Chairman Ben Bernanke was to speak.
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