Investing.com - The dollar fell to two-week lows against the yen on Monday after data showed that manufacturing activity in China contracted for a fourth month in April, adding to concerns that an economic slowdown in the world’s second-largest economy is deepening.
USD/JPY touched lows of 101.87, the weakest since April 16 and was last down 0.23% to 101.94.
The pair was likely to find support at 101.49, the low of April 14 and resistance at 102.25, the session high.
The drop in the dollar came after the final reading of China’s HSBC manufacturing purchasing managers’ index came in at 48.1, down from a preliminary estimate of 48.3 and missing forecasts for an uptick to 48.4. A reading below 50 indicates a contraction.
The dollar was already under pressure after giving up gains late Friday sparked by a far stronger-than-forecast U.S. jobs report.
The dollar initially strengthened after official data showed that the U.S. economy added 288,000 jobs in April, well above expectations for jobs growth of 210,000, while the unemployment rate dropped to a five-and-a-half year low of 6.3%.
However, the report also showed that the labor force participation rate, which measures the proportion of people either working or looking for work, fell and wage growth weakened.
The yen was also higher against the euro in thin trade, with markets in Japan closed on Monday and Tuesday for public holidays. EUR/JPY was down 0.21% to 141.42 from 141.71 on Friday.
Elsewhere, the dollar was steady against the euro, with EUR/USD trading at 1.3870, not far from the three-week peak of 1.3888 reached last Thursday.