USD/JPY at 104.55 on Fed Taper Talk

The dollar rose versus the yen on Tuesday, helped by renewed talk that the U.S. Federal Reserve may announce a further reduction of its bond-buying stimulus next week, while the New Zealand dollar surged after a surprise pick-up in inflation.

The U.S. dollar advanced 0.5 percent to 104.65 yen, bringing it closer to possible resistance near 104.92 yen, an intraday high hit on January 16.

Traders said a story in the Wall Street Journal’s online edition saying the Fed could announce a further reduction to its monthly bond purchases at the end of its January 28-29 policy meeting, to $65 billion from the current $75 billion, gave the dollar a boost.


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