Forex - USD/JPY gains on soft U.S., European data, bottom fishing
Published Jul 12, 2013 02:51PM ET
Lackluster economic indicators in the U.S. and Europe sparked safe-haven demand for the greenback.
In U.S. trading on Friday, USD/JPY was trading at 99.41 up 0.44%, up from a session low of 98.68 and off a high of 99.70.
The pair was likely to find resistance at 99.70, the earlier high, and support at 98.28, Thursday's low.
Euro zone industrial production fell 0.3% in May, according to official data, surpassing market calls for a 0.2% decline after a 0.5% increase the previous month.
The numbers pressured the euro lower, as the European Central Bank has suggested that interest rates may remain at their currently low levels or possible fall even further, which gave the dollar room to rise.
Meanwhile in the U.S. the preliminary Thomson Reuters/University of Michigan consumer sentiment index fell to 83.9 in July from 84.1 in June, defying expectations for a rise to 85.0.
Separately, the U.S. Department of Labor said producer price inflation rose 0.8% in June, beating expectations for a 0.5% gain and above a 0.5% increase the previous month.
The core producer price index, which excludes food and energy, rose 0.2% last month compared to expectations for a 0.1% increase, beating a 0.1% rise in May.
Federal Reserve Chairman Ben Bernanke said this week that stimulus programs will remain in place for the foreseeable future, which weakened the greenback though the currency regained strength on Friday after investors priced in loose monetary policy into trading.
The Fed is currently buying USD85 billion in assets a month to keep interest rates low, which weakens the dollar, though investors took up dollar positions on Friday on sentiments that such stimulus programs will begin to taper eventually.
The yen, meanwhile, was up against the pound and down against the euro, with GBP/JPY down 0.09% and trading at 150.12 and EUR/JPY trading up 0.19% at 129.83.
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Written By: Investing.com
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