Forexpros – The U.S. dollar edged lower against the yen on Wednesday, as safe haven demand waned while the Bank of Japan warned of the deepening impact of the euro zone’s debt crisis on the global economy.
USD/JPY hit 77.61 during late Asian trade, the pair’s lowest since December 1; the pair subsequently consolidated at 77.66, edging down 0.06%.
The pair was likely to find support at 77.45, the low of November 28 and short term resistance at 77.88, the high of November 9.
The greenback slipped amid hopes that European leaders will take decisive action to contain the region’s debt crisis at a summit later this week. European leaders are to discuss proposed changes to EU treaties which would allow for greater fiscal integration and stricter enforcement of budgetary discipline in the single currency bloc.
Meanwhile, investors were also eyeing the European Central Bank’s policy decision on Thursday, as the central bank is seen likely to cut interest rates by 0.25% to 1%.
Bank of Japan policymaker Koji Ishida warned earlier that emerging nations are starting to feel the pinch from slowing European growth and the risk of fund withdrawals.
He added that Japan will not be immune to the fallout as the euro zone’s problems may hurt its key export markets in emerging economies and keep investors’ demand strong for the safe-haven yen.
The yen was down against the euro with EUR/JPY gaining 0.18%, to trade at 104.37.
Later in the day, the U.S. is to release government data on crude oil stockpiles.
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