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COZfx: USD/JPY dips on US data, yen bargain hunting

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COZfx: USD/JPY dips on US data, yen bargain hunting

Postby dwang » Tue Sep 23, 2014 4:06 am

COZforex: The dollar dipped against the yen on Monday after soft US housing data prompted investors to sell the greenback for profits and snap up nicely-priced positions in the yen, which has fallen in recent session on sentiments for US and Japanese monetary policies to diverge.

In US trading, USD/JPY was down 0.11% at 108.95, up from a session low of 108.67 and off a high of 109.20. COZFX strategist Nigel Boynton said, USD/JPY is predicted to find support at 108.4, and a drop through could take it to the next support line of 108.1. Meanwhile, the pair is predicted to find its first resistance at 109.19, and a rise through could take it to the next resistance line of 109.68.

The National Association of Realtors reported earlier that existing home sales in the US unexpectedly dropped 1.8% to an annual unit rate of 5.05 million in August. Analysts had expected existing home sales to rise 1% to 5.20 million units, and the soft numbers sent investors selling the greenback for profits.

The yen saw support on sentiments that despite the likelihood that US monetary policy while tighten while Japan's will stay loose or loosen further, the Japanese currency was oversold.

Bank of Japan Governor Haruhiko Kuroda said recently monetary authorities would be prepared to immediately loosen monetary policy or implement other measures if its 2% inflation target becomes difficult to meet.

Recent data revealed that Japan’s second-quarter economic contraction was larger than initially estimated, and another report showed that the country’s current-account surplus fell short of expectations in July.

The lackluster data indicated the economy is struggling to gain momentum and fuelled expectations for more stimulus from the Japanese central bank.

On Tuesday, Japan is to release its latest manufacturing purchasing manager’s index.

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