Investing.com - The dollar firmed against the yen on Monday after industry data revealed pending U.S. home sales jumped for the first time in nine months in March.
In U.S. trading, USD/JPY was up 0.29% and trading at 102.49, up from a session low of 102.05 and off a high of 102.62.
The pair was expected to test support at 101.96, Friday''s low, and resistance at 102.73, Tuesday''s high.
The dollar firmed after the National Association of Realtors reported that pending home sales jumped 3.4% in March, far surpassing expectations for a 1% gain.
Pending home sales for February were revised to a 0.5% drop from a previously reported decline of 0.8%.
On a year-over-year basis, pending home sales were still down 7.9% in March, though the data firmed the dollar by reminding investors that the Federal Reserve will continue tapering monthly bond purchases as the year unfolds.
Fed bond purchases, currently set at $55 billion a month, weaken the dollar by suppressing long-term borrowing costs, and talk of their dismantling can strengthen the greenback.
The Bank of Japan will hold a policy meeting on Wednesday, and the monetary authority is widely seen keeping its stimulus programs in place, which softened the yen.
The yen, meanwhile, was down against the euro and down against the pound, with EUR/JPY up 0.38% at 141.90, and GBP/JPY trading up 0.41% at 172.32.
The euro saw support from expectations that euro zone inflation data due out on Wednesday will reveal an uptick in consumer prices.
An increase in the euro zone’s consumer price index would ease pressure on the European Central Bank to implement additional monetary policy measures.
In March, the euro zone''s annual inflation rate slowed to 0.5%, the lowest since November 2009. The ECB targets an inflation rate of close to but just under 2%.The consensus forecast is for the inflation rate to rise to 0.8%.
On Tuesday, the U.S. is to a report compiled by the Conference Board on consumer confidence.
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