Investing.com - The U.S. dollar slumped to a two-month low against the firmer yen on Friday, after weaker-than-forecast U.S. economic growth data fuelled speculation that the Federal Reserve may implement a fresh round of stimulus measures.
USD/JPY hit 81.68 on Wednesday, the weekly high; the pair subsequently consolidated at 80.24 by close of trade on Friday, falling 1.54% over the week.
The pair is likely to find support at 79.54, the low of February 21 and resistance at 81.43, Friday’s high.
The Commerce Department said gross domestic product in the U.S. expanded at a rate of 2.2% in the three months to March, below expectations for a 2.5% increase.
Earlier in the week, Fed Chairman Ben Bernanke left open the possibility of further measures to bolster economic growth, following the central bank’s monetary policy meeting.
Meanwhile, the yen strengthened broadly after new easing measures announced by the Bank of Japan fell short of some market expectations.
Following its monetary policy meeting on Thursday, the BoJ said it will increase the size of its asset purchase fund by JPY5 trillion, while a program to provide loans to banks was cut back by JPY5 trillion. Economists had expected an increase of as much JPY10 trillion to the nation’s stimulus program.
The central bank also kept interest rates on hold, in a widely expected decision.
Overall market sentiment was boosted on Friday as a well received auction of Italian government debt eased investor concerns over the euro zone, following a two-notch downgrade of Spain by ratings agency Standard & Poor’s.
S&P cut Spain’s long-term credit rating to BBB+ from A and gave it a negative outlook on Thursday, saying that the recession will undermine government efforts to reduce one of the largest budget deficits in the single currency bloc.
In the week ahead, Friday’s data on U.S. non-farm payrolls will be eagerly anticipated amid concerns that the economic recovery in the U.S. is losing momentum. In Japan, markets are to remain close for much of the week for holidays.
Ahead of the coming week, Investing.com has compiled a list of these and other significant events likely to affect the markets.
Monday, April 30
Markets in Japan are to remain closed due to a national holiday.
The U.S. is to publish official data on core personal consumption expenditures price inflation and on personal spending, followed by a report on business activity in Chicago.
Tuesday, May 1
In the U.S., the Institute for Supply Management is to release a closely watched report on manufacturing activity.
Wednesday, May 2
Japan is to publish government data on average cash earnings, an important inflationary indicator.
Later in the day, the U.S. is to produce a report on non-farm employment change, a leading indicator of economic health, followed by government data on factory orders and crude oil stockpiles.
Thursday, May 3
Markets in Japan are to remain closed due to a national holiday.
The U.S. is to produce government data on unemployment claims, as well as preliminary data on nonfarm productivity and unit labor costs, an important signal of consumer inflation. The country is also to publish an ISM report on service sector growth.
Friday, May 4
Markets in Japan are to remain closed due to a national holiday.
The U.S. is to round up the week by publishing its closely watched government data on non-farm employment change and the unemployment rate, as well as a report on average hourly earnings.
USD/JPY hit 81.68 on Wednesday, the weekly high; the pair subsequently consolidated at 80.24 by close of trade on Friday, falling 1.54% over the week.
The pair is likely to find support at 79.54, the low of February 21 and resistance at 81.43, Friday’s high.
The Commerce Department said gross domestic product in the U.S. expanded at a rate of 2.2% in the three months to March, below expectations for a 2.5% increase.
Earlier in the week, Fed Chairman Ben Bernanke left open the possibility of further measures to bolster economic growth, following the central bank’s monetary policy meeting.
Meanwhile, the yen strengthened broadly after new easing measures announced by the Bank of Japan fell short of some market expectations.
Following its monetary policy meeting on Thursday, the BoJ said it will increase the size of its asset purchase fund by JPY5 trillion, while a program to provide loans to banks was cut back by JPY5 trillion. Economists had expected an increase of as much JPY10 trillion to the nation’s stimulus program.
The central bank also kept interest rates on hold, in a widely expected decision.
Overall market sentiment was boosted on Friday as a well received auction of Italian government debt eased investor concerns over the euro zone, following a two-notch downgrade of Spain by ratings agency Standard & Poor’s.
S&P cut Spain’s long-term credit rating to BBB+ from A and gave it a negative outlook on Thursday, saying that the recession will undermine government efforts to reduce one of the largest budget deficits in the single currency bloc.
In the week ahead, Friday’s data on U.S. non-farm payrolls will be eagerly anticipated amid concerns that the economic recovery in the U.S. is losing momentum. In Japan, markets are to remain close for much of the week for holidays.
Ahead of the coming week, Investing.com has compiled a list of these and other significant events likely to affect the markets.
Monday, April 30
Markets in Japan are to remain closed due to a national holiday.
The U.S. is to publish official data on core personal consumption expenditures price inflation and on personal spending, followed by a report on business activity in Chicago.
Tuesday, May 1
In the U.S., the Institute for Supply Management is to release a closely watched report on manufacturing activity.
Wednesday, May 2
Japan is to publish government data on average cash earnings, an important inflationary indicator.
Later in the day, the U.S. is to produce a report on non-farm employment change, a leading indicator of economic health, followed by government data on factory orders and crude oil stockpiles.
Thursday, May 3
Markets in Japan are to remain closed due to a national holiday.
The U.S. is to produce government data on unemployment claims, as well as preliminary data on nonfarm productivity and unit labor costs, an important signal of consumer inflation. The country is also to publish an ISM report on service sector growth.
Friday, May 4
Markets in Japan are to remain closed due to a national holiday.
The U.S. is to round up the week by publishing its closely watched government data on non-farm employment change and the unemployment rate, as well as a report on average hourly earnings.