The dollar / yen is trading lower earlier on Wednesday, moving closer to the November 6 target at 103.177. Traders seem increasingly optimistic about a new US fiscal stimulus deal that will put pressure on the US dollar. Expectations of an extremely bearish US Federal Reserve are also weighing on the Forex pair.
At 04:42 GMT, USD / JPY is trading at 103.499, down 0.142 or -0.14%.
USD / JPY is lower but holds slightly above its six-week low as investors looked past new restrictions to tackle COVID-19 and focused on the likelihood of a new American stimulus which would weigh on the American dollar.
The dollar is weakened by hopes that U.S. lawmakers can agree on a $ 1.4 trillion spending program.
A $ 908 billion COVID-19 bipartisan relief plan will be split into two packages, a person briefed on the matter said, giving hope that at least a large part of the plan that already enjoys bipartisan support will be approved.
The first plan calls for $ 748 billion in spending on programs likely by both Republicans and Democrats, including federal unemployment benefits and supplemental loans under the Paycheck Protection Program. A second $ 160 billion bill would include the most controversial areas of corporate liability protection and financial assistance to state and local governments.
The US Federal Reserve is expected to keep interest rates near zero and signal the direction of rates in the coming years at its last policy meeting of the year. The Fed’s policy statement is due at 19:00 GMT.
Economic News from Japan
Japanese exports fell 4.2% in November from a year earlier, finance ministry data showed on Wednesday, as the COVID-19 crisis continued.
This compares to a 0.5% rise expected by economists in a Reuters poll and follows a 0.2% drop in October.
Imports fell 11.1%, compared to the median estimate of a 10.5% drop.
The trade balance showed a surplus of 366.8 billion yen ($ 3.54 billion), against the median estimate of a surplus of 529.8 billion yen.
Activity at Japanese factories was a striking distance from stabilization in December, a private sector investigation showed on Wednesday, even as a resurgence of coronavirus cases wreaks havoc on economies around the world, especially in Europe .
The slowing decline in manufacturing is likely to boost policymakers’ confidence in the ability of Japan’s export-oriented economy to weather the crisis even as the service sector is hit hard by the worsening surge in infections in the world. COVID-19.
Japan’s manufacturing purchasing managers index (PMI) at Jibun Bank rose to seasonally adjusted 49.7 from 49.0 in November, declining at the slowest pace in 19 months.