US dollar showed a retreat against the Japanese yen on Tuesday, following the decline in Asian and European stocks, which boosted safe haven demand for the yen.
USD/JPY fell to its lowest point today at 96.98 at 7:40 GMT, also the pairs lowest since August 16th, after which consolidation followed at 97.13. Support was likely to be received at August 13th low, 96.84, while resistance was to be encountered at August 19th high, 98.11.
Safe haven demand for the yen was triggered as Japans leading Nikkei 225 index plunged 2.63% overnight.
In addition, it became clear that Japanese all industries activity index dropped by 0.6% in June, after the 1.2% advance a month ago. Preliminary estimates pointed a larger decrease in June, by 0.7%.
Meanwhile, market players awaited the release of the minutes of Federal Reserve Bank’s July meeting, scheduled on Wednesday, as it may provide clues on when the central bank may begin tapering its stimulus program. Policymakers will probably begin to pare back the central bank’s bond-buying program in September. These expectations were strengthened after on August 15th a report said that the weekly initial jobless claims in the United States decreased in number to their lowest in almost six years.
The Japanese currency was steady against the euro, as EUR/JPY cross dipped 0.03% to trade at 130.08 at 8:38 GMT. On the other hand, GBP/JPY pair was losing 0.18% for the day, trading at 152.43 at 8:38 GMT.
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