Investing.com - The yen rose against the dollar and the euro on Friday as safe haven demand was bolstered by fears over an economic slowdown in China and tensions over the crisis in Ukraine, ahead of a referendum in Crimea.
USD/JPY ended Friday’s session down 0.44% to two-week low of 101.34. For the week, the pair lost 1.84%, the largest weekly decline since late January.
EUR/JPY was down 0.12% to 141.02 at the close, after falling as low as 140.45 earlier.
Investor sentiment was hit as weak economic reports from China raised fresh concerns over the strength of the world’s second-largest economy. On Thursday, Chinese Premier Li Keqiang warned that the economy faced "severe challenges" in 2014.
Fears over problems in China’s financial sector also sapped risk appetite following the country’s first domestic bond default this month.
Meanwhile, tensions between Russia and the West remained high ahead of Sunday's referendum in Ukraine’s Crimea region, now controlled by pro-Russian forces, on whether citizens want to join Russia.
The referendum has been condemned as "illegal" by Kiev and the West.
The traditional safe haven Swiss franc was also stronger against the dollar, with USD/CHF down 0.26% to 0.8721 on Friday, not far from Thursday’s low of 0.8698, the weakest level since October 2011.
The euro moved higher against the dollar on Friday, with EUR/USD up 0.33% to 1.3913 at the close, holding below Thursday’s peaks of 1.3966, the strongest level since October 31, 2011.
The euro lost ground against the dollar and the yen on Thursday after European Central Bank President Mario Draghi said the strong euro was putting downward pressure on euro zone inflation.
Draghi said the strength of the euro was becoming increasingly relevant to the bank’s assessment of price stability, indicating growing concerns that the appreciation of the euro could undermine the fragile recovery in the euro area.
The New Zealand dollar ended the week higher against the dollar after the Reserve Bank raised interest rates to 2.75% from a record low 2.5% on Thursday, becoming the first developed nation to exit record-low borrowing costs.
NZD/USD rose to 10-month peaks of 0.8604 on Thursday, before paring back gains to settle at 0.8532 on Friday. The pair ended the week with gains of 0.78%.
In the week ahead, investors will be looking ahead to Wednesday’s monetary policy announcement by the Federal Reserve. The bank is also to publish its economic forecasts.
The euro zone is to produce the closely watched ZEW index of German economic sentiment, while the U.K. is to release data on employment.
Ahead of the coming week, Investing.com has compiled a list of these and other significant events likely to affect the markets.
Monday, March 17
The euro zone is to release data on consumer price inflation, which accounts for the majority of overall inflation.
Canada is to produce data on foreign investments.
The U.S. is to publish data on manufacturing activity in the Empire State, as well as reports on industrial production and long term securities transactions.
Tuesday, March 18
The Reserve Bank of Australia is to publish the minutes of its latest policy meeting, which contain valuable insights into economic conditions from the bank’s perspective.
The ZEW Institute is to release its closely watched report on German economic sentiment, a leading indicator of economic health.
Canada is to publish data on manufacturing sales. Later Tuesday, Bank of Canada Governor Steven Poloz is to speak, his comments will be closely watched.
The U.S. is to produce data on consumer inflation, in addition to reports on building permits and housing starts.
Bank of England Governor Mark Carney is to speak at an event in London.
Wednesday, March 19
Japan is to publish data on the trade balance, the difference in value between imports and exports. Meanwhile, Bank of Japan Governor Haruhiko Kuroda is to speak at an event in Tokyo.
The U.K. is to release official data on the change in the number of people unemployed and the unemployment rate, as well as data on average earnings and public sector borrowing. Meanwhile, the Bank of England is to publish the minutes of its most recent policy setting meeting.
The ZEW Institute is to publish a report on economic expectations in Switzerland, a leading indicator of economic health.
Canada is to release data on wholesale sales.
The Federal Reserve is to announce its federal funds rate and publish economic forecasts for inflation and growth. The Fed statement is to be followed by a press conference with Chair Janet Yellen.
Later Wednesday, New Zealand is to publish data on fourth quarter gross domestic product, the broadest indicator of economic activity and the leading indicator of economic growth.
Thursday, March 20
Germany is to release data on producer price inflation.
BoJ Governor Haruhiko Kuroda is to speak at an event in Tokyo.
The Swiss National Bank is to announce its libor rate. The bank is also to publish its quarterly monetary policy assessment.
Political leaders and finance ministers from the EU are to hold the first day of an economic summit in Brussels.
The U.K. is to release private sector data on industrial order expectations. The U.K. government is to make its annual budget statement.
The U.S. is to publish the weekly report on initial jobless claims, as well as data on existing home sales and manufacturing activity in the Philadelphia region.
Friday, March 21
Markets in Japan are to remain closed for a national holiday.
The euro zone is to release data on the current account.
Meanwhile, political leaders and finance ministers from the European Union are to hold the second day of an economic summit in Brussels.
The U.K. is to produce data on public sector net borrowing.
Canada is to produce official data on retail sales, the government measure of consumer spending, which accounts for the majority of overall economic activity, as well as data on consumer inflation.