Forex - USD/JPY drops ahead of Federal Reserve policy announcement
Published Sep 12, 2012 09:27PM ET
In Asian trading on Thursday, USD/JPY was trading at 77.78, down 0.10%, up from a session low of 77.71 and off a high of 77.83.
The pair was likely to find support at 77.70, Tuesday's low, and resistance at 77.97, Wednesday's high.
The Federal Reserve wraps up a two-day monetary policy meeting later Thursday, and many market watchers are expecting the U.S. central bank to announce plans to jolt the economy with stimulus tools, likely a third round of quantitative easing.
Under quantitative easing, the Fed buys assets such as Treasury holdings or mortgage-backed securities held by banks, pumping the economy full of fresh liquidity in a way that pushes down interest rates to encourage investing and job demand.
Such accommodative policies, include two rounds of quantitative easing released since the 2008 financial crisis, tend to weaken the dollar by design.
Meanwhile in Japan, the government reported earlier that core machinery orders far exceeded expectations in July, climbing 4.6% after a 5.6% increase the previous month.
Analysts had expected core machinery orders to rise 1.5% in July.
Elsewhere in Japan, the country's tertiary industry activity index fell more than expected in July, according to official data.
The Japanese tertiary industry activity index fell to a seasonally adjusted -0.8%, from 0.2% in the preceding month whose figure was revised up from 0.1%.
Analysts had expected Japanese tertiary industry activity index to fall -0.4% last month.
Japan's corporate goods price index, meanwhile, fell less than expected in August.
The Bank of Japan reported that the country's Corporate Goods Price Index fell to a seasonally adjusted annual rate of -1.8%, from -2.1% in the preceding month.
Analysts had expected Japan’s Corporate Goods Price Index to fall -1.9% last month.
The yen, meanwhile was up against the pound and flat against the euro, with GBP/JPY down 0.04% and trading at 125.32 and EUR/JPY trading unchanged at 100.43.
All eyes will focus on the Federal Reserve later Thursday, with investors eager to see if the U.S. central bank unveils accommodative changes to monetary policy.
Get The News You Want
Written By: Investing.com
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.