Forexpros – The U.S. dollar was almost unchanged against the yen on Monday, as concerns over the debt crisis in the euro zone continued to dominate market sentiment.
USD/JPY hit 77.46 during late Asian trade, the daily low; the pair subsequently consolidated at 77.66, inching down 0.08%.
The pair was likely to find support at 77.10, the low of November 25 and resistance at 78.09, the high of November 8.
Earlier in the day, the governor of the Bank of Japan warned that the outlook for the country’s economy remained clouded by the ongoing debt crisis in the euro zone and the strong yen, signaling the central bank’s readiness to boost monetary stimulus.
Also Monday, Kokusai Asset Management, Japan’s biggest mutual fund, said it had sold all its Italian, Spanish and Belgian bond holdings, spooked by a jump in Italian bond yields to above 7% and other signs that the crisis in Europe was deepening.
Meanwhile, in the euro zone negotiations on a groundbreaking fiscal pact aimed at preventing the currency bloc from fracturing continued.
Viewed as a first step toward closer fiscal and economic coordination within the single currency area, the proposal would make budget discipline legally binding and enforceable by European authorities.
But investors remained jittery after the International Monetary Fund denied reports that it was preparing a EUR600 billion aid package for Italy.
The yen was lower against the euro with EUR/JPY rising 0.53%, to hit 103.45.
Later in the day, the U.S. was to release official data on new home sales.
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