Forex - USD/JPY pares losses as Japan upgrades nuclear crisis

Forex Pros – The U.S. dollar pared losses against the yen on Tuesday, easing off a seven-day low hit after Japan raised the severity rating of its nuclear crisis to the same level as the 1986 Chernobyl disaster.

USD/JPY retreated from 83.45, the pair’s lowest since April 1, to hit 84.31 during early European trade, down 0.32% on the day.

The pair was likely to find support at 83.11, the low of April 1 and resistance at 82.38, last Friday’s high.

The yen advanced after Japan's Nuclear and Industrial Safety Agency said earlier that based on cumulative levels of radiation released, the severity of the incident at the Fukushima Daiichi power plant had been raised to seven, the worst on an internationally recognized scale.

It had previously been put at a five rating, on a par with the 1979 Three Mile Island incident in the United States.

Meanwhile, the Bank of Japan governor said the economy was in a "severe state", while central bankers were uncertain when efforts to rebuild the northeast would boost growth, according to minutes from a meeting held three days after the earthquake struck.

The yen was also higher against the euro, with EUR/JPY shedding 0.36% to hit 121.66.

Elsewhere, on Monday the International Monetary Fund cut its 2011 growth outlook for Japan to 1.4% from a previous estimate of 1.6%, citing the impact of the devastating March 11 earthquake and tsunami.

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