Forexpros – The U.S. dollar edged lower against the yen on Wednesday, as markets were jittery ahead of comments by the Federal Reserve later in the day, while investors continued to focus on developments in the euro zone.

USD/JPY hit 78.80 during early European trade, the pair’s lowest since June 18; the pair subsequently consolidated at 78.91, edging down 0.07%.

The pair was likely to find support at 78.60, the low of June 6 and resistance at 79.50, the high of June 15.

Investors awaited the conclusion of the Federal Reserve’s two-day policy meeting later Wednesday, amid growing expectations that policymakers may announce a third round of monetary stimulus after a recent string of weak economic data.

Markets were also eyeing events in Greece, amid reports local party leaders may be close to forming a coalition government, which would allow Athens to resume negotiations with creditors on its international bailout deal.

Meanwhile, the yield on Spanish 10-year bonds eased back to just below the critical 7% threshold, after climbing to euro-era highs earlier in the week, amid fears that Madrid will be forced to seek a full-fledged international bailout.

In Japan, government data showed that the trade deficit widened unexpectedly in May, falling to JPY0.66 trillion from a deficit of JPY0.51 trillion the previous month. Analysts had expected Japan’s trade deficit to narrow to JPY0.36 trillion in May.

In addition, the Bank of Japan said earlier, in the minutes of its May policy meeting, that it has been pursuing “powerful monetary easing”. Several policymakers added that Europe’s sovereign debt crisis could hurt Japan’s economy.

Elsewhere, the yen was higher against the euro with EUR/JPY falling 0.10%, to hit 100.05.

Later in the day, the Fed was to announce its benchmark interest rate and publish its rate statement. The announcement was to be followed by a press conference with Fed Chairman Ben Bernanke to discuss the monetary policy decision.