Forex - USD/JPY rises after downbeat Japanese data, eyes on Fed

The U.S. dollar rose against the yen on Tuesday, after the release of downbeat economic reports out of Japan, while markets eyed the Federal Reserve's monthly policy meeting, set to begin later in the day. 

USD/JPY hit 98.47 during early European trade, the session high; the pair subsequently consolidated at 98.34, gaining 0.39%. 

The pair was likely to find support at 97.24, the low of June 26 and resistance at 99.36, the high of July 26. 

In Japan, preliminary data on Tuesday showed that industrial production fell more-than-expected last month, dropping 3.3% after a 1.9% increase in May. 

Analysts had expected industrial production to decline 1.8% in June. 

A separate report showed that household spending in Japan fell at an annualized rate of 0.4% in June, confounding expectations for a 1% rise, following a 1.6% decline the previous month. 

The greenback found some support after the release of positive U.S. data on Monday added to expectations for a near-term end to the Federal Reserve's bond-buying program. 

Industry data showed that U.S. pending home sales fell 0.4% in June, less than the expected 1% decline, after a 5.8% rise the previous month.

The yen was lower against the euro with EUR/JPY advancing 0.36%, to hit 130.39. 

The single currency found support after data showed that the Gfk German consumer climate index rose more-than-expected in July, ticking up to 7.0 from a reading of 6.8 the previous month. 

Analysts had expected the index to rise to 6.9 this month. 

Later in the day, the U.S. was to release data on the Standard & Poor's/Case-Shiller Composite-20 house price index, followed by the Conference Board's report on consumer confidence.