On Tuesday US dollar was firmer and advanced against the yen, as markets eyed the possible outcome of Federal Reserve Banks meeting on policy, scheduled on Wednesday.
USD/JPY pair reached 95.12 during early European session, after which consolidation followed at 95.01. Support was expected at Mondays low, 94.09, while resistance was to be met at last Fridays high, 95.81.
Investors were focusing on Wednesdays highly anticipated FED meeting for clues on monetary policy, after last month FED Chairman Ben Bernanke said that the bank could begin tapering asset purchases at some of the future meetings, if economic conditions were sufficiently good.
The dollar lost positions, sliding to two-month lows versus the yen last week on growing FEDs easing program scale back expectations, which introduced cautious decisions among market participants and a broad selling of risk assets.
Additionally, demand for the Japanese yen was bolstered last week, as domestic stocks crumbled and government bond market experienced strong volatility, while Bank of Japan took no correspondent measures to ease these conditions.
Earlier today it was reported that Final Industrial Production in Japan increased at a smaller than projected rate in April on a monthly basis, 0.9% versus 1.7%. In annual terms, the indicator took a sharper drop in April, 3.4%, compared to the rate of decrease during March, 2.3%. Preliminary estimates pointed a 2.3% drop.
Meanwhile, Japanese yen was lower against the euro, with EUR/JPY pair rising by 0.23% to 126.60.
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