Forexpros –
Forexpros – The U.S. dollar moved lower against the Japanese yen in Asian trade Wednesday, as the Swiss National Bank’s decision to limit losses in the Swiss franc spurred speculation that Japan may follow suit with its own currency.
In mid-day Asian trade USD/JPY hit 77.71, the pair’s highest since Monday; the pair subsequently consolidated at 77.40, dropping 0.33%.
The pair was likely to find support at 76.29, the low of August 11, and resistance at 78.34, the high of August 8.
Earlier Tuesday, the Swiss franc plunged versus its major counterparts, including the euro, as the Swiss National Bank set a floor for EUR/CHF at 1.20 in an effort to lessen the negative effects a strong currency would have on exports.
The Swiss central bank’s decision spurred speculation that the Bank of Japan would follow Switzerland’s lead and intervene in exchange markets to weaken the yen against its counterparts.
The BOJ stepped in on August 4, as USD/JPY fell below 77.01, and was scheduled to wrap up its two-day policy meeting later Wednesday.
Japanese Finance Minister Jun Azumi said he will press Group of Seven officials about the dangers a strong yen presents to Japan’s economy when he meets them for the first time in Marseille, France, on Sept. 9.
Azumi became Japan’s finance chief last week, succeeding new Prime Minister Yoshiko Noda.
Earlier Tuesday, the U.S. Institute of Supply Management reported its non-manufacturing purchasing manager’s index rose by 0.6 in August to 53.3 from 52.7 the previous month.
Economists had forecast the index to fall to 51.0 for the month.
An ISM manufacturing index above 50.0 indicates expansion in the non-manufacturing sector, while below 50.0 is a sign of general contraction.
Meanwhile, the yen moved higher against both the euro and the British pound with EUR/JPY down 0.10% to hit 108.58, and GBP/JPY falling 0.19% to hit 123.54.
Later Wednesday, Federal Reserve Bank President Charles Evans was scheduled to speak on the U.S. economic outlook at the Futures & Options Expo in Chicago.
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