Forexpros – The yen slid against the dollar Wednesday in mid-session Asian trading as investors sold currencies on sentiment Europe will work its way out of the debt crisis and the global economy will improve.
USD/JPY was trading at 77.73, up 0.006%, paring ealier losses.
The pair was likely to find support at 77.49, Thursday’s low, and resistance at 78.11, Monday’s high.
Many investors remained focused on Europe throughout the Asian trading session.
On Monday, U.S. ratings agency Standard & Poor’s said it was putting 15 European nations on CreditWatch with negative implications, meaning downgrades were likely even for those countries with top-notch AAA ratings, which include Germany, France, the Netherlands, Austria, Finland and Luxembourg.
Furthermore, a bailout fund created by European countries to prop up troubled economies was slapped with a Standard & Poor’s warning as well, prompting currency traders to adopt a wait-and-see attitude.
Asian stock markets were up as sentiment may be growing that the ratings warning may result in concrete action on the part of European policymakers, including ditching previous unwillingness to centralize fiscal decisions under one authority.
Such a move would end up allowing one or a few countries telling others what to dole out in taxes and what they get back to spend.
The Japanese government, meanwhile, is set to release bank lending and balance of payments information later Wednesday although the figures weren’t expected to generate much volatility.
Meanwhile, the dollar was down against the euro and the pound, with EUR/USD up 0.15% to hit 1.3421 and GBP/USD rising 0.06% to hit 1.5608.
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