Investing.com - The euro rose to a one-month high against the yen on Thursday, as signs of further easing measures by the Bank of Japan weighed on the yen, while sustained concerns over the worsening of the financial situation in the euro zone pressured the single currency.
EUR/JPY hit 101.62 during European afternoon trade, the pair’s highest since May 22; the pair subsequently consolidated at 101.38, rising 0.31%.
The pair was likely to find support at 100.53, the session low and resistance at 102.37, the high of May 17.
The yen weakened after Bank of Japan policymaker Koji Ishida said earlier that the central bank is prepared to take bold action to support the economy when necessary, signaling the possibility of further monetary easing next month.
But the euro’s gains were limited after data showed that manufacturing activity in the euro zone contracted at the fastest pace since June 2009 this month, with the purchasing managers’ index falling to 44.8, down from a final reading of 45.1 in May.
The euro zone’s services PMI ticked up to 46.8 from 46.7 in May, against expectations for a dip to 46.5, but remained well below the 50 level that separates contraction from expansion.
Manufacturing activity in Germany slowed to the lowest level in three years in June, as the ongoing euro zone crisis hit export demand.
Investors also remained cautious ahead of the release of an audit of Spanish banks later in the day, amid concerns that the results could show that a EUR100 billion bailout for the country’s banks agreed earlier this month would not be large enough.
Spain’s Treasury sold slightly more than the targeted amount of EUR2 billion at an action of government debt earlier in the day, but the country’s borrowing costs rose sharply.
The average yield on the five-year bond climbed to 6.07%, up from 4.96% at a similar auction last month. Following the auction, the yield on Spanish 10-year bonds eased back to 6.55%, after rising to a euro-era high of 7.28% earlier in the week.
The euro also remained under pressure after the Federal Reserve announced Wednesday that it is extending the current bond buying program until the end of the year, disappointing expectations for more aggressive measures, following a recent string of weak U.S. data.
Elsewhere, the yen was sharply lower against the U.S. dollar, with USD/JPY climbing 0.68%, to hit 80.07.
Also Thursday, the U.S. Department of Labor said the number of individuals filing for initial jobless benefits in the week ending June 16 fell to 387,000, disappointing expectations for a decline to 380,000.
Later in the day, European Central Bank head Mario Draghi was to speak, while the U.S. was to produce preliminary data on manufacturing activity and an industry report on existing home sales. The country was also to release data on manufacturing activity in the Philadelphia area.
EUR/JPY hit 101.62 during European afternoon trade, the pair’s highest since May 22; the pair subsequently consolidated at 101.38, rising 0.31%.
The pair was likely to find support at 100.53, the session low and resistance at 102.37, the high of May 17.
The yen weakened after Bank of Japan policymaker Koji Ishida said earlier that the central bank is prepared to take bold action to support the economy when necessary, signaling the possibility of further monetary easing next month.
But the euro’s gains were limited after data showed that manufacturing activity in the euro zone contracted at the fastest pace since June 2009 this month, with the purchasing managers’ index falling to 44.8, down from a final reading of 45.1 in May.
The euro zone’s services PMI ticked up to 46.8 from 46.7 in May, against expectations for a dip to 46.5, but remained well below the 50 level that separates contraction from expansion.
Manufacturing activity in Germany slowed to the lowest level in three years in June, as the ongoing euro zone crisis hit export demand.
Investors also remained cautious ahead of the release of an audit of Spanish banks later in the day, amid concerns that the results could show that a EUR100 billion bailout for the country’s banks agreed earlier this month would not be large enough.
Spain’s Treasury sold slightly more than the targeted amount of EUR2 billion at an action of government debt earlier in the day, but the country’s borrowing costs rose sharply.
The average yield on the five-year bond climbed to 6.07%, up from 4.96% at a similar auction last month. Following the auction, the yield on Spanish 10-year bonds eased back to 6.55%, after rising to a euro-era high of 7.28% earlier in the week.
The euro also remained under pressure after the Federal Reserve announced Wednesday that it is extending the current bond buying program until the end of the year, disappointing expectations for more aggressive measures, following a recent string of weak U.S. data.
Elsewhere, the yen was sharply lower against the U.S. dollar, with USD/JPY climbing 0.68%, to hit 80.07.
Also Thursday, the U.S. Department of Labor said the number of individuals filing for initial jobless benefits in the week ending June 16 fell to 387,000, disappointing expectations for a decline to 380,000.
Later in the day, European Central Bank head Mario Draghi was to speak, while the U.S. was to produce preliminary data on manufacturing activity and an industry report on existing home sales. The country was also to release data on manufacturing activity in the Philadelphia area.