US dollar fell against the Japanese yen on Friday, following the statement by Bank of Japan Governor Haruhiko Kuroda, while the decision by Fed to leave stimulus unchanged continued to weigh on the greenback.
USD/JPY slid to a session low at 99.16 at 4:30 GMT, after which consolidation followed at 99.28, still losing 0.18% for the day. Support was likely to be received at September 19th low, 97.99, while resistance was to be met at September 13th high, 99.97.
In its statement in Tokyo, Bank of Japan Governor Haruhiko Kuroda gave a positive assessment regarding development of foreign economies, including the United States. He expected that economies will be recovering at a moderate pace and this will provide support to Japanese export and capital expenditures in the country. He also reiterated his call for Japanese government efforts to impose control on countrys finances, stating that sustainable finances are an “indispensable” prerequisite in order to achieve sustainable growth.
Meanwhile, the greenback faced a heavy selling pressure on Wednesday after the Federal Reserve Bank refrained from introducing a change in its easing program of 85 billion USD per month. This decision underscored Chairman Ben Bernanke’s willingness to do anything to lower unemployment and pushed back market expectations for a tightening of policy. Bernanke said at the press conference after the FOMC meeting, that the central bank must determine its policies based on “what’s needed for the economy,” even if it surprises global markets.
However, the dollar index, which tracks the performance of the US dollar against a basket of six other major currencies, continued to recover from the sharp decline, registered earlier, as it found support by the upbeat US data on Thursday. The Philadelphia Fed index, gauging business activity in the region, rose to its highest point in over two years to reach 22.3 in September from a reading of 9.3 in August. Existing home sales in the United States unexpectedly increased in August, marking their highest level in six years and reaching the annual 5.48 million units, as buyers appeared to be eager to purchase a home before mortgage rates increase additionally. The dollar index was trading in the 80.40-80.60 range, as at 8:20 GMT it was losing a mere 0.02% for the day to reach 80.47.
Elsewhere, the Japanese yen was higher against the euro, with EUR/JPY cross losing 0.16% on a daily basis to trade at 134.35 at 8:22 GMT.
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