Forex - USD/JPY up as market digests Fed minutes, sees tapering likely

The dollar rose against the yen on Wednesday after the release of the Federal Reserve's minutes from its July policy meeting, which hinted that the U.S. central bank remains on course to tapering stimulus measures though a general lack of clarity as to when allowed for choppy trading.

In U.S. trading on Wednesday, USD/JPY was trading at 97.86, up 0.61%, up from a session low of 97.13 and off a high of 97.97.

The pair was likely to find resistance at 98.12, Monday's high, and support at 96.92, Tuesday's low.

The Fed said in the minutes of its July policy meeting released earlier that most monetary authorities see a need to begin tapering monthly bond purchases soon, which strengthened the dollar, though the U.S. central bank remained unclear whether such a decision may come in September or later in the year, which allowed for choppy trading.

The Fed is currently purchasing USD85 billion in bonds a month to spur recovery, a monetary policy tool known as quantitative easting that pushes borrowing costs down and softens the dollar in the process.

Elsewhere, the National Association of Realtors reported earlier that existing home sales jumped 6.5% to 5.39 million annual unit rate in July from June’s revised total of 5.06 million. Analysts were expecting U.S. existing home sales to edge up 1.6% to 5.15 million units.

The numbers helped strengthen the dollar earlier before all eyes turned to the Fed minutes.

The yen, meanwhile, was down against the pound and down against the euro, with GBP/JPY up 0.77% and trading at 153.56 and EUR/JPYtrading up 0.18% at 130.74.