Forex - USD/JPY extends gains on growing talk of BoJ easing
Published May 21, 2012 09:36PM ET
Investing.com - The dollar extended Monday's gains against the yen on Tuesday as expectations continued to build that the Bank of Japan will stimulate the economy by weakening the yen via monetary easing measures.
In Asian trading on Tuesday, USD/JPY hit 79.34, up 0.04%, up from a low of 79.27 and off a high of 79.44.
The pair sought to test support at 79.00, the low from May 18, and resistance at 80.38, the high on May 17.
The Bank of Japan is holding a two-day monetary policy meeting, and expectations are growing the bank will stimulate the economy by weakening the yen.
Concerns that Japan will post a second consecutive trade deficit in April will likely fuel monetary authority to take steps to spur growth via a weaker yen, which would benefit the country's vital export sector.
Bank of Japan Governor Masaaki Shirakawa has said growth is important for the country.
Meanwhile, the country's All Industries Activity Index fell 0.3% in March from February, worse the market expectations for a flat reading.
The yen, meanwhile, was up against the pound and up against the euro, with GBP/JPY down 0.08% and trading at 125.48 and EUR/JPY down 0.16% and trading at 101.49.
The Bank of Japan will move the yen when it announces it decision on interest rates and the need or not for stimulus.
Elsewhere, the U.S. will unveil industry data on existing home sales, a leading indicator of economic health to the country's housing sector.
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Written By: Investing.com
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