USD/JPY falls on concern over US Treasury purchase plan

NEW YORK (Forex News Now) – The dollar fell against the yen on Tuesday as speculation increased that the US Federal Reserve will add to its Treasury bond-purchase plan.

In currency market trading, USD/JPY hit 82.59 at around 7:00 A.M., down 0.09% on the day, after hitting a new 3-week low of 82.34.

Federal Reserve Chairman Ben Bernanke this week defended the bank’s $600 billion purchase plan, saying the economy is still struggling without government help and indicating that an increase in purchases was possible.

According to USD/JPY analysis, the greenback was likely to touch key support around the low of Nov. 11, 82.04, and encounter resistance around yesterday’s high of 83.00.

The greenback’s fall also came as it weakened against most major counterparts on the Treasury speculation.

Elsewhere, the dollar suffered heavy losses against the pound: GBP/USD traded at 1.5757, up 0.26% according to intraday analysis.