The USD/JPY pair dropped further early Tuesday to reach its lowest level in seven weeks, where the weak dollar helped the Japanese yen to record more gains and to increase pressure on dollar after risk appetite returned the FX market.
The Beginning of 2012 carried some optimism in the financial market which reduced demand for safe haven currencies such as the dollar, pushing it down against most of its major counterparts.
On the other hand, the expected recovery in the U.S. manufacturing sector helped to restore more confidence between investors, while the solid manufacturing numbers about China and India gave a strong signs about the global demand.
The Japanese yen also retreated against most of its major counterparts, but still within its previous levels, as expectations refer to further pessimism in the global market due to the ongoing EU crisis despite the optimism beginning for 2012.
On Wednesday at 12:00 GMT, the American Factory Orders for November will be published, where the expectations refer to 2.0% from the previous drop of 0.4%. While the Total Vehicle Sales for December is expected to come at 13.50 million from the prior 13.59 million.
Originally posted here
