USD/JPY off session lows, but gains were capped

yen-dollarUS dollar bounced off session lows against the Japanese yen on Friday, but gains remained capped due to comments by FED Chairman Ben Bernanke still weighing on greenbacks demand.

USD/JPY pulled back from a session low at 98.66 at 00:00 GMT on Friday, after which consolidation followed at 99.05. The cross was up by 0.09%. Support was likely to be found at June 27th low, 97.56, while resistance was expected at June 30th high, 99.54.

US dollar took a sharp drop against its major peers after on Wednesday Federal Reserve Bank Chairman Ben Bernanke said, that central bank’s policy should remain accommodative, even after the minutes of FED’s June meeting revealed that there were debates, regarding a possible exit to the stimulus program. According to FED minutes, half of the 19 members of FOMC voted in favor of terminating monthly asset purchases by the end of this year. However, some policymakers were not convenient with this idea, because, in their view, US labor market was in need of further improvement. Ben Bernanke stressed that the central bank will not consider an increase in the base interest rate, until Unemployment rate in the country falls as low as 6.5%.

In the mean time, Japanese yen received support after on Thursday Bank of Japan Governor Haruhiko Kuroda and other policy makers abstained from introducing additional monetary stimulus and raised their assessment of the economy, which has begun to revitalize for the first time since the March 2011 disaster. The bank also kept its forecast from April, regarding a 1.9% increase in Japanese core consumer price index in the 12 months, starting in April 2015. In addition, officials from the central bank confirmed the optimistic outlook over Japanese industry and export, as these sectors were expected to expand in the coming months. According to Bank Of Japans monthly report, export will rise at a moderate pace, as well as industrial production in the country, due to increasing corporate profits and improving economies overseas.

Japanese yen advanced versus the euro, as EUR/JPY cross slipped by 0.11% to 129.49 at 7:32 GMT. is a financial media specialized in providing daily news and education covering Forex, equities and commodities. Our academies for traders cover Forex, Price Action and Social Trading.

Related News