Investing.com - The dollar rose to the highest level in a week against the yen on Thursday after data showing that Chinese manufacturing activity improved in May dampened safe haven demand for the Japanese currency.
USD/JPY hit 101.76, the highest since May 15 and was last up 0.26% to 101.64.
The pair was likely to find support at 101.25 and resistance at 102.10, the high of May 15.
Market sentiment was boosted after data on Thursday showed that the preliminary reading of China’s HSBC manufacturing index rose to a five month high of 49.7 this month, up from a final reading 48.1 in April, but still remained below the 50 level separating contraction from expansion.
The dollar remained supported against the yen, as U.S. Treasury yields recovered from recent lows. The dollar fell to three-and-a-half month lows against the yen on Wednesday as expectations for more stimulus by the Bank of Japan diminished.
Wednesday’s minutes of the Federal Reserve’s April meeting indicated that the bank continues to see a slow improvement in the economy, but reiterated that rates are likely to remain on hold at record lows for some time after its asset purchase program ends.
The euro was lower against the dollar, with EUR/USD down 0.14% to 1.3666, not far from the two-and-a-half month trough of 1.3633 reached on Wednesday.
Investors were looking ahead to private sector data from the euro zone later in the session, amid heightened expectations for monetary easing by the European Central Bank at its June meeting.
Elsewhere, the euro pushed higher against the yen, with EUR/JPY easing up 0.14% to 138.93, holding above Wednesday’s more than three-month trough of 138.13.