COZfx: USD/JPY near 1-month lows ahead of Fed meeting

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COZforex: The US dollar declined near one-month lows against the yen on Monday, as demand for the greenback came under pressure ahead of the Federal Reserve's 2 day policy meeting this week, during growing uncertainty over the future of the central bank's stimulus program.

USD/JPY hit 97.64 during early European trade, the pair's lowest since June 25; the pair subsequently consolidated at 97.96, shedding 0.36%. COZ senior foreign exchange risk investment trader Desmond Doyle said, USD/JPY is predicted to find support at 97.36, and a drop through could take it to the next support line of 96.84. Meanwhile, the pair is predicted to find its first resistance at 98.68, and a rose through could take it to the next resistance line of 99.47.

Markets were jittery ahead of the Fed's upcoming policy statement, as a string of mixed US economic reports last week fuelled further uncertainty over whether the central bank will soon begin to scale back its bond-buying program.

The data came a day after the Labor Department said the number of individuals filing for initial jobless benefits the previous week increased by 7,000 to a seasonally adjusted 343,000, compared to expectations for an increase of 6,000 to 340,000.

In Japan, government data on Monday showed that retail sales rise by an annualized rate of 1.6% in June, less than the expected 1.9% increase, after a 0.8% gain the previous month.

Separately, Bank of Japan Governor Haruhido Kuroda said the stimulus measures introduced by the central bank last April are having positive effects on financial markets, the economy, and expectations for price rises. Speaking at the Research Institute of Japan, in Tokyo, Kuroda cautioned however that the BoJ is still far from achieving its 2% inflation goal.

Later in the day, the US was to produce industry data on pending home sales.

(COZ forex UK)