Forexpros – The U.S. dollar was almost unchanged against the yen on Wednesday, as investors remained cautious ahead of a policy statement by the Federal Reserve later in the day, while markets also eyed the European Central Bank’s own meeting on Thursday.
USD/JPY hit 77.92 during early European trade, the pair’s lowest since June 1; the pair subsequently consolidated at 78.11, edging down 0.01%.
The pair was likely to find support at 77.65, the low of June 1 and a four-month low and resistance at 78.53, the high of July 30.
Markets were jittery ahead of the upcoming Fed announcement, amid speculation over whether the U.S. central bank will indicate if further quantitative easing measures are imminent.
Meanwhile, investors also remained concerned that the ECB may disappoint market expectations for bold steps to counter the euro zone debt crisis at its policy meeting on Thursday.
Expectations have been mounting that the ECB will announce measures to lower Spanish and Italian borrowing costs after central bank chief Mario Draghi pledged last week to do whatever is necessary to preserve the euro.
The greenback fell to a two-month low against the yen earlier, after data showed that Chinese manufacturing activity slumped to an eight-month low in July, sparking renewed fears over a slowdown in the world’s second largest economy.
Elsewhere, Japanese Finance Minister Jun Azumi shrugged off calls for the Bank of Japan to buy foreign bonds to help weaken the yen, arguing that doing so would breach the finance ministry’s jurisdiction on exchange rate policy.
But Azumi stressed he was not ruling out any measure to counter excessive yen appreciation.
The yen was lower against the euro with EUR/JPY edging up 0.11%, to hit 96.26.
Later in the day, the U.S. was to produce data on non-farm employment change, while the Institute for Supply Management was to produce a report on manufacturing activity.
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