Forexpros – The U.S. dollar edged lower against the yen on Thursday, as investors eyed an Italian government bond auction later in the day and highly anticipated Greek elections on Sunday amid sustained concerns over the handling of the debt crisis in the euro zone.
USD/JPY hit 79.32 during early European trade, the daily low; the pair subsequently consolidated at 79.40, inching down 0.10%.
The pair was likely to find support at 79.10, the low of June 8 and resistance at 79.78, the high of June 7.
Investors remained cautious as Italy was preparing to sell up to EUR4.5 billion in long term bonds later in the day, amid growing fears the country will be the next euro zone member to require a bailout. Rome saw borrowing costs surge to the highest level since December at an auction of 12-month government bonds on Wednesday.
Meanwhile, markets were also jittery ahead of highly anticipated Greek elections on Sunday, which could determine the country’s future in the euro zone.
Market sentiment had weakened on Wednesday after Moody’s rating agency downgraded Spain’s credit rating by three notches, from A3 to Baa3, citing the nation’s increased debt burden, weakening economy and limited access to capital markets.
Elsewhere, the yen was flat against the euro with EUR/JPY trading at 99.80.
Later in the day, the U.S. was to produce official data on consumer price inflation and the country’s current account, as well as a government report on initial unemployment claims.