Forexpros – The U.S. dollar edged lower against the yen on Monday, as markets consolidated after Friday’s broad based risk rally, but hopes for steps to tackle the euro zone debt crisis and Friday’s robust U.S. jobs data supported risk appetite.
USD/JPY hit 78.34 during late Asian trade, the session low; the pair subsequently consolidated at 78.37, slipping 0.12%.
The pair was likely to find support at 77.90, the low of August 1 and a two-month low and resistance at 78.76, Friday’s high.
Overall market sentiment remained supported after the European Central Bank indicated Thursday that it may restart its bond buying program, to help lower Spanish and Italian borrowing costs.
But investors remained wary amid concerns over how effective the ECB’s new bond buying program would be, in the light of differences from the bank’s existing scheme.
Friday’s data showing that the U.S. economy added 163,000 jobs in July, the biggest increase since February and outstripping expectations for an increase of 100,000 also buoyed investor confidence.
However, the U.S. unemployment rate unexpectedly ticked up to 8.3%, from 8.2% in the preceding month, keeping alive speculation over the possibility of further monetary stimulus from the Federal Reserve.
The yen was higher against the euro, with EUR/JPY down 0.21% to 96.99.
Later in the day, Federal Reserve Chairman Ben Bernanke was to speak; his comments would be closely watched by investors.
Forexpros
