NEW YORK (Forex News Now) – The yen surged to a fresh 15-year high against the dollar on Wednesday, despite the Bank of Japan’s pledge to keep interest rates virtually at zero and pump more cash into the economy.
In European afternoon currency market trading, USD/JPY hit 82.74, the new 15-year low. The currency pair later rose slightly to trade at 82.98, down 0.3 percent on the day.
The yen’s gains also came after the U.S. Treasury Secretary, Timothy F. Geithner, warned that the rebalancing of the economy was “at risk of being undermined” by countries trying to stop their currencies from strengthening.
“Over time, more and more countries face stronger pressure to lean against the market forces pushing up the value of their currencies,” Geithner said in a speech at the Brookings Institute.
“The collective impact of this behavior risks either causing inflation and asset bubbles in emerging economies, or else depressing consumption growth and intensifying short-term distortions in favor of exports.”
According to intraday analysis, USD/JPY was likely to touch support around 82.74 and encounter immediate resistance around the high of Sept. 27, 84.39.
Meanwhile, Japan was due early Thursday to publish reports on machine tool orders, a leading indicator, and the country’s general economic outlook.
Elsewhere, the yen fell versus the euro: EUR/JPY traded at 115.58, up 0.36 percent.