Forex - USD/JPY higher after encouraging Chinese data

Published 11/01/2012, 04:04 AM
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Investing.com - The U.S. dollar was higher against the yen on Thursday, after Chinese data showed that manufacturing activity improved, while fresh easing measures by the Bank of Japan also weighed on demand for the yen.

USD/JPY hit 80.13 during late Asian trade, the pair’s highest since Tuesday; the pair subsequently consolidated at 79.99, gaining 0.29%.

The pair was likely to find support at 79.51, Wednesday’s low and resistance at 80.37, the high of October 26 and a four-month high.

Market sentiment found support after official data showed that China’s manufacturing purchasing managers’ index came in at 50.2 in October, up from 49.8 in September, just slightly below forecasts for a reading of 50.3.

A separate report showed that the final reading of China’s HSBC PMI came in at 49.5 in September, an eight month high.

The data eased concerns over a slowdown in the world’s second largest economy, but investors remained cautious ahead of U.S. data on nonfarm payrolls on Friday and the U.S. presidential elections next week.

The yen also came under pressure as investors resumed selling the currency, following initial disappointment after the BoJ’s easing on Tuesday.

The BoJ increased the size of its asset purchase program by JPY11 trillion, disappointing expectations for more aggressive easing measures.

The yen was fractionally lower against the euro, with EUR/JPY inching up 0.09% to 103.47.

Later in the day, the U.S. was to release the ADP report on nonfarm payrolls, as well as the weekly government report on initial jobless claims.

In addition, the Institute of Supply Management was to publish data on U.S. manufacturing activity.



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