Forexpros – The euro edged up to a three-day high against the yen on Tuesday, as speculation for more easing measures by the Bank of Japan weighed on demand for the yen while investors turned to a key European Union summit to be held on Wednesday.
EUR/JPY hit 102.02 during European afternoon trade, the pair’s highest since May 17; the pair subsequently consolidated at 101.78, inching up 0.13%.
The pair was likely to find support at 100.85, the low of May 21 and resistance at 102.70, the high of May 16.
The BoJ began its two-day policy meeting on Tuesday, amid expectations for new stimulus measures after the central bank previously expanded its asset-purchase program in February and April.
Meanwhile, sentiment on the euro remained fragile ahead of Wednesday’s EU summit, amid concerns over a divide between France’s new President Francois Hollande, who favors measures designed to support growth and pro-austerity Germany.
President Hollande was expected to propose the introduction of joint euro bonds at the summit, but Germany has repeatedly resisted the idea, arguing they would lessen pressure for heavily indebted countries to get their finances in order.
Earlier Tuesday, the Organization for Economic Cooperation and Development cut its growth forecasts for the euro zone for 2012 and 2013 and warned that a “combination of enduring financial fragility, rising unemployment and social pain may spark political contagion and adverse market reaction.”
Elsewhere, Spain successful auctioned EUR2.5 billion of short-term debt, but the country’s borrowing costs rose, pressured higher by sustained concerns over the economic outlook and the health of the country’s banking sector.
The yen was also lower against the U.S. dollar with USD/JPY climbing 0.67%, to hit 79.82.
Later in the day, the U.S. was to release industry data on existing home sales.
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