Forex - USD/JPY trims losses, stays lower on Fed easing concerns
Published Oct 18, 2013 02:49PM ET
In U.S. trading on Friday, USD/JPY was trading at 97.88, down 0.04%, up from a session low of 97.56 and off a high of 98.16.
The pair was likely to find support at 96.57, the low from Oct. 7, and resistance at 99.00, Thursday's high.
While markets breathed a sigh of relief after the U.S. Congress passed legislation to reopen the government and raise the debt ceiling this week, concerns continued to persist that the Federal Reserve may delay plans to taper its stimulus program until early 2014.
The Fed is currently buying USD85 billion in Treasury holdings and mortgage debt a month to boost the economy, a monetary policy tool known as quantitative easing that drives down interest rates to spur recovery, weakening the dollar in the process.
Prior to the fiscal showdown in Washington, markets were expecting the Fed to begin tapering the pace of its asset purchases in late October or early December, though many have pushed back estimates for a start date to early 2014, possibly after current Fed Chair Ben Bernanke steps down on Jan. 31.
Separately, investors snapped up yen positions after official data showed that China's gross domestic product grew by 7.8% in the third quarter, in line with expectations and up from 7.5% in the three months to June.
The data eased concerns over the strength of the recovery in the world's second-largest economy.
The yen was up against the pound and up against the euro, with GBP/JPY down 0.05% and trading at 158.18 and EUR/JPY trading down 0.03% at 133.89.
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Written By: Investing.com
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