Forexpros – The U.S. dollar was almost unchanged against the yen on Tuesday, swinging between small gains and losses as uncertainty over the outcome of Italy’s current political woes supported safe haven demand.
USD/JPY hit 78.00 during late Asian trade, the daily low; the pair subsequently consolidated at 78.02, inching down 0.02%.
The pair was likely to find support at 77.62, the low of July 28 and resistance at 78.46, the high of August 8.
Risk sentiment was hit as Italian Prime Minister Silvio Berlusconi was preparing for a key vote on public finances, later Tuesday. The vote will test Berlusconi’s majority in parliament and determine if he has enough support to stay in power and implement austerity measures, after Italy’s borrowing costs surged to euro-era highs on Monday.
The prime minister denied reports that he was planning to resign and said he was convinced his government was going to survive.
Greece was to announce the new head of an interim government later Tuesday, amid ongoing efforts to avoid a potential default.
Meanwhile, Japan continued to buy bonds from the euro zone’s bailout fund, extending crucial aid to the region as it continues to fight its deepening debt crisis.
Elsewhere, the yen was up against the euro with EUR/JPY shedding 0.12%, to hit 107.39.
Also Tuesday, finance ministers from the European Union member states were to meet in Brussels to discuss the region’s ongoing financial crisis.
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