Investing.com - The U.S. dollar traded lower against the Japanese yen
during Tuesday’s Asian session as the Federal Reserve is seen as sending
mixed messages about its intentions to taper its USD85 billion-a-month
bond-buying program.
In Asian trading Tuesday, USD/JPY
fell 0.06% to 98.80 after earlier trading as low as 98.67. The pair was
likely to find support at 97.77, Wednesday's low, and resistance at
99.67, Friday's high.
The Federal Reserve last week made no
changes to its USD85 billion monthly bond-buying program, which weakens
the dollar to spur recovery.
Many market participants were
expecting the U.S. central bank to trim the total by USD10 billion or
more now that the economy is gaining steam.
On Monday, Federal
Reserve Bank of New York President William Dudley said the stimulus
program would stay in place until data show that recovery will be
sustained.
"Our decisions on how to adjust our policy tools—for
example, the pace of asset purchases and forward guidance with respect
to the level of short-term rates—must be rooted in the ongoing flow of
information that informs our judgments about the prospects for a
sustainable recovery," said Dudley.
Dudley’s comments conflict
with those made by last Friday by St. Louis Fed President James Bullard
who said Friday the decision not to taper in September was “close” and
indicated that there could be a small reduction in bond purchases in
October.
In times of uncertainty, investors prefer safe-haven
plays, of which the yen is one. Lingering uncertainty about the future
of tapering could force the dollar lower against the yen, a scenario yen
bears do not favor.
Elsewhere, EUR/JPY inched down 0.05% to 133.34 while AUD/JPY fell 0.28% to 92.99.
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