Investing.com - The dollar came off six-year highs against the yen on Friday after weekly U.S. jobless claims missed expectations, though the data did little to send investors rethinking when interest rates may rise in the U.S.
In U.S. trading, USD/JPY was unchanged at 106.86, up from a session low of 106.64 and off a high of 107.19.
The pair was expected to test support at 104.67, last Friday's low, and resistance at 108.0, the high from Sept. 19, 2008.
The U.S. Department of Labor reported earlier that the number of individuals filing for initial jobless benefits in the week ending Sept. 6 increased by 11,000 to a 10-week high of 315,000 from the previous week’s revised total of 304,000.
Analysts had expected jobless claims to fall by 4,000 to 300,000 last week, and the figure gave investors room to sell the greenback for profits.
The dollar still remained strong against the Japanese currency, as the labor market has shown consistent improvement this year.
Furthermore, the labor market often appears weaker than it really is in August due to seasonal factors, while factory, service-sector, gross domestic product and other data all point to a U.S. recovery that is gaining steam, with hiccups here and there.
The Federal Reserve will conclude a two-day policy meeting next week, and markets expect the monetary authority to cut its monthly bond-buying program by $10 billion to $15 billion, with many hoping for language hinting at when interest rates may rise.
A Federal Reserve Bank of San Francisco report published on Monday suggested rate hikes may come sooner than markets may be expecting.
The dollar rose to six year peaks against the yen earlier Thursday after BoJ Governor Haruhiko Kuroda said the bank would be prepared to immediately loosen monetary policy or implement other measures if its 2% inflation target becomes difficult to meet.
Earlier this week official data showed that Japan’s second quarter economic contraction was larger than initially estimated, and another report showed that the country’s current account surplus fell short of expectations in July.
The lackluster data indicated the economy is struggling to gain momentum and fuelled expectations for more stimulus from the Japanese central bank.
The yen, meanwhile, was down against the euro and down against the pound, with EUR/JPY up 0.21% at 138.33, and GBP/JPY trading up 0.12% at 173.44.
On Friday, more heavy-hitting data will publish.
The U.S. is to release data on retail sales, the government measure of consumer spending, which accounts for the majority of overall economic activity.
The U.S. is also to release what will be closely watched preliminary data on consumer sentiment.