Investing.com - The dollar was higher against the yen on Friday, recovering some losses from the previous session as uncertainty over how soon the Federal Reserve will start to phase out its stimulus program persisted.
USD/JPY hit session highs of 97.78 on Friday before settling at 97.61, gaining 0.23% for the day and ending the week 0.43% higher.
The pair is likely to find support at 96.84, the low of August 13 and resistance at 98.42, the high of August 14.
The dollar was boosted after the University of Michigan said its consumer sentiment index fell from a six-year high of 85.1 in July to 80.0 in August. Economists had expected the index to tick up to 85.5.
The data came amid ongoing speculation over how soon the Federal Reserve will start to phase out its bond buying program. Fed Chairman Ben Bernanke has said that the decision to begin tapering the bank’s USD85 billion-a-month asset purchase program will depend on whether economic data is strong enough.
Expectations that the Fed may begin tapering as soon as September were boosted on Thursday after the Department of Labor said the number of people who filed for unemployment assistance in the U.S. fell to the lowest level since January 2008 last week, dropping by 15,000 to 320,000.
In Japan, official data on Monday showed that the economy expanded at a slower than expected rate in the second quarter.
The Cabinet Office said Japan’s economy expanded by 0.6% in the three months to June and grew by 2.6% on a year-over-year basis. Economists had forecast quarter-on-quarter growth of 0.9% and an expansion of 3.6% on a year-over-year basis.
The euro ended the week higher against the yen, with EUR/JPY gaining 0.70% to 130.09 at the close of trade on Friday.
In the euro zone, data on Wednesday showed that the region’s economy returned to growth in the second quarter, emerging from an 18-month recession.
Eurostat said the euro zone’s economy expanded by 0.3% in the three months to June. Economists had expected quarter-on-quarter growth of 0.2%. France’s economy expanded 0.5%, following two consecutive quarters of contraction, while Germany’s economy expanded by a larger than forecast 0.7%.
In the week ahead, investors will be looking ahead to Wednesday’s minutes of the Federal Reserve’s most recent meeting, while U.S. data on initial jobless claims and the housing sector will also be closely watched.
Manufacturing data from China and service and manufacturing data out of the euro zone will also be in focus.
Ahead of the coming week, Investing.com has compiled a list of these and other significant events likely to affect the markets. The guide skips Tuesday as there are no relevant events on this day.
Monday, August 19
Japan is to release data on the trade balance, the difference in value between imports and exports.
Wednesday, August 21
The U.S. is to publish private sector data on existing home sales, a leading indicator of economic health. In addition the Federal Reserve is to publish the minutes of its most recent policy setting meeting.
Thursday, August 22
The U.S. is to release the weekly government report on initial jobless claims.
Friday, August 23
The U.S. is to round up the week with data on new home sales, a leading indicator of economic health.
USD/JPY hit session highs of 97.78 on Friday before settling at 97.61, gaining 0.23% for the day and ending the week 0.43% higher.
The pair is likely to find support at 96.84, the low of August 13 and resistance at 98.42, the high of August 14.
The dollar was boosted after the University of Michigan said its consumer sentiment index fell from a six-year high of 85.1 in July to 80.0 in August. Economists had expected the index to tick up to 85.5.
The data came amid ongoing speculation over how soon the Federal Reserve will start to phase out its bond buying program. Fed Chairman Ben Bernanke has said that the decision to begin tapering the bank’s USD85 billion-a-month asset purchase program will depend on whether economic data is strong enough.
Expectations that the Fed may begin tapering as soon as September were boosted on Thursday after the Department of Labor said the number of people who filed for unemployment assistance in the U.S. fell to the lowest level since January 2008 last week, dropping by 15,000 to 320,000.
In Japan, official data on Monday showed that the economy expanded at a slower than expected rate in the second quarter.
The Cabinet Office said Japan’s economy expanded by 0.6% in the three months to June and grew by 2.6% on a year-over-year basis. Economists had forecast quarter-on-quarter growth of 0.9% and an expansion of 3.6% on a year-over-year basis.
The euro ended the week higher against the yen, with EUR/JPY gaining 0.70% to 130.09 at the close of trade on Friday.
In the euro zone, data on Wednesday showed that the region’s economy returned to growth in the second quarter, emerging from an 18-month recession.
Eurostat said the euro zone’s economy expanded by 0.3% in the three months to June. Economists had expected quarter-on-quarter growth of 0.2%. France’s economy expanded 0.5%, following two consecutive quarters of contraction, while Germany’s economy expanded by a larger than forecast 0.7%.
In the week ahead, investors will be looking ahead to Wednesday’s minutes of the Federal Reserve’s most recent meeting, while U.S. data on initial jobless claims and the housing sector will also be closely watched.
Manufacturing data from China and service and manufacturing data out of the euro zone will also be in focus.
Ahead of the coming week, Investing.com has compiled a list of these and other significant events likely to affect the markets. The guide skips Tuesday as there are no relevant events on this day.
Monday, August 19
Japan is to release data on the trade balance, the difference in value between imports and exports.
Wednesday, August 21
The U.S. is to publish private sector data on existing home sales, a leading indicator of economic health. In addition the Federal Reserve is to publish the minutes of its most recent policy setting meeting.
Thursday, August 22
The U.S. is to release the weekly government report on initial jobless claims.
Friday, August 23
The U.S. is to round up the week with data on new home sales, a leading indicator of economic health.