USD/JPY preserves gains, trading in proximity to six-month highs

The US dollar preserved gains against the Japanese yen, on Wednesday, trading in proximity to highs unseen in six months. The minutes of Bank of Japan’s (BoJ) most recent policy meeting revealed, that some policymakers saw greater downside risks to nation’s economy, while the majority saw a balanced risk.

USD/JPY reached a session high at 101.73 at 7:30 GMT, after which the pair consolidated at 101.70, up 0.43% for the day. Support was likely to be found at November 26th low, 101.15, while resistance was to be encountered at November 25th high, 101.92, which was also the highest level since May 29th.

The minutes of Bank of Japans most recent meeting on policy revealed that some members of the board have their doubts about the accomplishment of the inflation objective. According to the minutes, BoJ board member Sayuri Shirai said that “attention should be paid to the downside risks” to the bank’s outlook report as “there was a high degree of uncertainty regarding developments in overseas economies and households’ employment and income situation”.

Takehiro Sato, another board member, cited by Bloomberg, said that consumer prices “are somewhat tilted to the downside” rather than that risks were “being largely balanced.”, while Kiuchi proposed making the central banks 2% inflation target more flexible.

Despite that BoJ Governor, Haruhiko Kuroda saw a significant progress towards this objective, while Japanese economy was recovering at a moderate pace, after the country has experienced 15 years of deflation. At the international financial forum in Tokyo Kuroda said that central bank’s target could be reached sometime late in the fiscal year through 2014 or early in 2015.

Meanwhile, S&P and Case-Shiller published data regarding home prices in 20 large cities in the United States on Tuesday. In annual terms, prices continued to rise in September, with the corresponding index gaining 13.29%, compared to a 12.80% gain a month ago, which was a revision down from a 12.82% gain previously. September’s performance of the index outpaced median estimates of analysts, which pointed a 12.97% increase in home prices.

In addition, a survey on US consumer confidence by the Conference Board for November showed disappointing results yesterday, as the index, based on these results, reached a reading of 70.4 this month, coming short of analysts’ expectations and lower in comparison with last month’s value of 71.2.

Elsewhere, USD/CAD reached a daily high at 1.0560 at 7:55 GMT, while EUR/USD hit a session high at 1.3600 at 3:40 GMT, marking its highest level since October 31st.