Topic: COZfx: Dollar rises to fresh 7-year peak vs. yen
COZforex: The US dollar rise to fresh seven-year highs against the yen, even after the release of disappointing private sector employment data from the US, as the diverging policy outlook between the Federal Reserve and the Bank of Japan continued to weigh on the yen.
USD/JPY hit 119.48 amid early US trade, the pair's highest since August 2007; the pair subsequently consolidated at 119.42, edging up 0.14%. COZforex senior currency strategist Ian • Quigley said, the pair was likely to find support at 118.20, Tuesday's low and resistance at 119.85.
Payroll processor ADP reported on Wednesday that the US private sector created 208,000 jobs in November, falling short of expectations for jobs growth of 223,000 and down from 233,000 in October.
Meanwhile, the yen remained under pressure after the BoJ unexpectedly expanded its stimulus program in late October. In contrast, the Fed wound up its asset purchase program in October and is weighing whether or not the economy is strong enough to start raising interest rates next year.
On Monday, ratings agency Moody’s downgraded Japan's sovereign debt rating by one notch to A1. The ratings agency cited uncertainty over Japan’s ability to cut its fiscal deficit following a decision by Prime Minister Shinzo Abe to delay a planned sales tax increase.
Prime Minister Abe dissolved parliament earlier this month, clearing the way for elections to be held on December 15 to seek a fresh mandate for his economic policies, which call for a weaker yen. The decision came after data showing that Japan’s economy unexpectedly dropped into recession in the third quarter.
Later in the day, the Institute of Supply Management was to publish a report on US service sector activity.
(COZ forex UK)