Forexpros – The U.S. dollar pared gains against the yen on Tuesday, after briefly spiking to a one-week high as remarks by Japan’s finance minister were interpreted as hinting at more intervention by Japan.
USD/JPY pulled back from 77.32, the pair’s highest since November 15, to hit 77.03 during late Asian trade, still up 0.19%.
The pair was likely to find support at 76.57, last Friday’s two-week low and resistance 77.32, the days high.
Earlier in the day, Japanese Finance Minister Jun Azumi dismissed a proposal to buy large amounts of foreign bonds as a form of intervention, saying the idea did not fit well with government thinking.
The dollar jumped as some traders initially believed the remarks were a sign of more intervention to come.
Meanwhile, concerns over sovereign debt issues in the U.S. remained in focus after ratings agency Fitch said the failure of a congressional committee to agree on a package of measures to slash the U.S. deficit was likely to lead to a revision of the rating outlook to ‘negative’, rather than a downgrade.
Standard & Poor’s said the news bore out its decision to downgrade its U.S. credit rating in August.
The yen was also lower against the euro, with EUR/JPY rising 0.42% to hit 104.17.
Later Tuesday, the U.S. was to release preliminary data on gross domestic product, while the U.S. Federal Reserve was to publish the minutes of its November policy meeting.
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