Investing.com - The dollar fell to two-week lows against the yen on Friday after data showed that U.S. fourth quarter growth was revised down, while concerns over tensions in Ukraine and a weaker Chinese yuan also supported safe haven demand for the yen.
USD/JPY fell to lows of 101.54, the weakest since February 17 and was last down 0.33% to 101.78. For the week, the pair lost 0.70%.
The pair is likely to find support at 101.23, the low of February 6 and resistance at 102.28, Friday’s high.
The dollar weakened after the Commerce Department reported that U.S. fourth quarter gross domestic product was revised down to an annual rate of 2.4%, from a preliminary estimate of 3.2%. Analysts had expected a downward revision to 2.5%.
Earlier in the week, Fed Chair Janet Yellen acknowledged recent weakness in U.S. data, saying it indicates softness in the economy.
In testimony to the Senate banking committee in Washington, Ms. Yellen said it was hard to say how much the recent soft data was due to weather and added that the bank would be attentive to signals on whether the recovery is progressing in line with expectations.
Demand for the yen was also underpinned as political and military tensions between Russia and Ukraine escalated, following reports that armed men had occupied airports in the pro-Russia Crimea region.
Meanwhile, concerns over a steep decline in the Chinese yuan curbed risk appetite, amid speculation that the country’s central bank has intervened to add volatility to the currency ahead of possible economic reforms.
Elsewhere, the euro gained ground against the yen on Friday, with EUR/JPY ending Friday’s session up 0.34% at 140.48.
The euro was boosted after data on Friday showed that the annual rate of consumer inflation in the euro zone rose 0.8% in February, above expectations for a reading of 0.7%.
The inflation rate is still well below the European Central Bank’s 2% target, but the data eased pressure on the bank to tighten monetary policy at its upcoming policy meeting on Thursday.
In the week ahead, investors will be anticipating Friday’s U.S. nonfarm payrolls report for an indication of the strength of the recovery in the labor market. U.S. data on manufacturing and service sector activity will also be closely watched.
Ahead of the coming week, Investing.com has compiled a list of these and other significant events likely to affect the markets.
Monday, March 3
Japan is to release data on capital spending.
The U.S. is to release data on personal spending, while the Institute of Supply Management is to release data on manufacturing activity.
Tuesday, March 4
Japan is to produce a report on average cash earnings.
Wednesday, March 5
The U.S. is to release the ADP report on private sector job creation, which leads the government’s nonfarm payrolls report by two days. Meanwhile, the ISM is to publish a report service sector activity.
Thursday, March 6
The U.S. is to publish the weekly report on initial jobless claims and data on factory orders.
Friday, March 7
The U.S. is to round up the week with the closely watched government data on nonfarm payrolls and the unemployment rate.