Forexpros – The U.S. dollar was almost unchanged against the yen on Thursday, as investors remained cautious ahead of a highly anticipated policy statement by the European Central Bank, after the Federal Reserve refrained from announcing any immediate stimulus measures.
USD/JPY hit 78.53 during early European trade, the pair’s highest since July 30; the pair subsequently consolidated at 78.46, edging up 0.05%.
The pair was likely to find support at 77.99, the low of July 26 and resistance at 78.96, the high of June 5.
Expectations that the ECB may resume its bond buying program, to help lower Spanish and Italian borrowing costs, have been building since central bank President Mario Draghi pledged last week to do whatever it takes to preserve the euro.
Investors remained cautious however, amid concerns that an inadequate policy response by the ECB could send markets lower.
Meanwhile, the greenback found support after the U.S. central bank stopped short of launching a third round of quantitative easing, at its policy-setting meeting on Wednesday.
The Fed did indicate, however, that it will “closely monitor” the economy and “will provide additional accommodation as needed to promote a stronger economic recovery and sustained improvement in labor market conditions.”
Earlier in the day, Bank of Japan policymaker Yoshihisa Morimoto warned that strong uncertainty exists over the strength of the country’s economic recovery, signaling that the central bank stands ready to ease monetary policy further if global risks grow enough to threaten Japan’s prospects.
The yen was lower against the euro with EUR/JPY rising 0.22%, to hit 96.09.
Later in the day, the U.S. was to release government data on initial jobless claims and factory orders.
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