Investing.com - The dollar pushed higher against the yen late Friday after falling to one week lows earlier in the session as safe haven demand for the Japanese currency was boosted by heightened geopolitical tensions.
USD/JPY touched lows of 101.05, the lowest since July 10 before edging up 0.16% to 101.32 late Friday, to end the week little changed.
The pair is likely to find support at the 100.85 level and resistance at 101.68, Thursday’s high.
The yen strengthened broadly on Friday following the shooting down of a Malaysia Airlines jet in eastern Ukraine. Moscow has denied involvement in the crash, which came a day after the U.S. announced a fresh round of sanctions against Russia for supporting separatists in east Ukraine.
Markets were also unsettled as Israel expanded its ground offensive in Gaza.
Demand for the dollar continued to be underpinned after Federal Reserve Chair Janet Yellen indicated earlier in the week that interest rates may rise sooner if the economy continues to improve.
Elsewhere Friday, the weaker euro fell to five month lows against the yen. EUR/JPY hit lows of 136.72, the lowest since February 5 and was last at 137.07. The pair lost 0.59% for the week.
The single currency came under pressure after the Bank of Italy cut its growth forecast for 2014 to 0.2% from 0.7% and warned that risks to the economy remained to the downside.
The announcement underlined concerns over the faltering economic recovery in the currency bloc.
Earlier in the week European Central Bank President Mario Draghi said that large scale asset purchases are “squarely” within the bank’s mandate. The remarks were the latest indication that the central bank is open to further monetary easing measures to stave off the risk of deflation in the euro area.
In the week ahead, the U.S. is to release what will be closely watched data on consumer prices, home sales and manufacturing orders, while Japan is to produce data on trade and inflation.
Ahead of the coming week, Investing.com has compiled a list of these and other significant events likely to affect the markets. The guide skips Wednesday as there are no relevant events on these days.
Monday, July 21
Markets in Japan are to remain closed for a national holiday.
Tuesday, July 22
The U.S. is to release reports on consumer price inflation and existing home sales.
Thursday, July 24
Japan is to release data on the trade balance, the difference in value between imports and exports.
The U.S. is to produce data on unemployment claims, manufacturing activity and new home sales.
Friday, July 25
Japan is to release data on consumer inflation.
The U.S. is to round up the week with data on durable goods orders.