Forexpros – The euro edged higher against the yen on Tuesday, but remained under pressure as renewed concerns over the debt crisis in the euro zone weighed on the single currency amid growing expectations for further monetary easing by the Bank of Japan.
EUR/JPY hit 109.64 during European afternoon trade, the daily high; the pair subsequently consolidated at 109.40, inching up 0.07%.
The pair was likely to find support at 108.48, the low of March 22 and resistance at 109.97, the high of March 16 and a four-and-a-half high.
Sentiment on the euro was hit after official data confirmed that the euro zone’s economy contracted by 0.3% in the final three months of 2011, unchanged from a preliminary estimate. Annualized gross domestic product contracted by 0.7% in the fourth quarter.
A separate report showed that producer price inflation in the euro zone rose more-than-expected in February, climbing 0.6%, slightly higher than expectations for a 0.5% gain.
Data on Monday showed that manufacturing activity in the euro zone remained in contraction territory for the eighth successive month in March, while a separate report showed that the bloc’s unemployment rate ticked up to a record high of 10.8% in February.
The euro had strengthened against the greenback earlier after a report on Monday showed the U.S. manufacturing sector expanded more-than-forecast in March, while official data from China on Sunday showed that manufacturing activity in the world’s second largest economy jumped to an 11-month high last month.
In Japan, official data showed earlier that the monetary base fell at an annualized rate of 0.2% in March after increasing by 11.3% the previous month, underlining concerns over the risk of deflation.
The yen was lower against the U.S. dollar with USD/JPY adding 0.10%, to hit 82.16.
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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