Dollar rises against yen amid speculation over Fed easing

NEW YORK (Forex News Now) – The dollar rose against the yen on Monday, climbing from close to an 8-month low, amid speculation that the U.S. Federal Reserve may consider further monetary easing policy this week.

In early European currency trading, USD/JPY traded at 85.66, up 0.31 percent on the day, after rising from Friday’s 8-month low of 85.02.

The greenback plunged on Friday after Labor Department data on nonfarm payrolls showed that the U.S. economy lost more jobs than expected in July, while the unemployment rate held steady at 9.5 percent.

According to forex analysis, USD/JPY is likely to touch immediate support around 85.02, and encounter resistance around Thursday’s high, 86.45.

Official data in Japan, meanwhile, showed on Monday that the country’s service sector sentiment index rose more than expected in July. The “Economy Watchers” index climbed to 49.8 during the month, the Japanese Cabinet Office said, from 47.5 in June.

Analysts had expected a more modest rise to 48 in July, two global forex news outlets reported.

Elsewhere, the yen fell versus the euro: EUR/JPY traded at 113.73, up 0.19 percent on the day.