Forexpros – The U.S. dollar was almost unchanged against the yen on Tuesday, as investors moved to take in profits after the yen hit a three-week high amid growing expectations for further monetary easing by the Bank of Japan to boost economic growth.
USD/JPY hit 81.56 during early European trade, the pair’s lowest since March 9; the pair subsequently consolidated at 82.05, inching 0.03% lower.
The pair was likely to find support at 81.45, the low of March 9 and resistance at 82.51, the high of March 12.
The BoJ has come under growing scrutiny in recent weeks as sentiment among Japan’s largest manufacturers failed to improve in March and after data showed on Monday that the Tankan manufacturing index remained unchanged at minus 4 in the last quarter, disappointing expectations for a rise to minus 1.
Moreover, Governor Masaaki Shirakawa and his officials pledged “powerful easing” until 1% inflation is in sight.
Earlier in the day, government data showed that average cash earnings in Japan rose far more-than-expected in February, adding 0.7% after a 0.9% decline the previous month. Analysts had expected average cash earnings to rise 0.2% in February.
Meanwhile, sentiment remained supported after data showed on Monday that manufacturing activity in the U.S. rose at a faster rate than expected in March, expanding for the 32nd consecutive month.
Elsewhere, the yen was lower against the euro with EUR/JPY rising 0.18%, to hit 109.53.
Later in the day, the U.S. was to produce official data on factory orders, while the Federal Reserve was to release the minutes of its most recent policy meeting.
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