Investing.com - The dollar rose to two-week highs against the yen on Friday after unexpectedly strong U.S. manufacturing data bolstered expectations that the Federal Reserve may scale back stimulus measures sooner than expected.
USD/JPY ended Friday’s session at 98.70, 0.34% higher for the day, after falling as low as 97.80 earlier. The pair ended the week 1.09% higher.
The pair was likely to find support at 97.45, the low of October 29 and resistance at 98.99, the high of October 17.
The dollar gained ground after the Institute of Supply Management said its manufacturing purchasing managers’ index rose to 56.4 in October, the highest since April 2011, from 56.2 in September. Economists had expected the index to tick down to 55.0.
The Fed left its USD85 billion-a-month asset purchase program in place following its monthly meeting on Wednesday. The bank gave no clear indication whether it would start scaling back stimulus at the December meeting or continue it into the start of 2014.
"The housing sector has slowed somewhat in recent months," the Fed statement said. However, Fed officials stuck to the view that the economy is expanding "at a moderate pace" and said downside risks were diminishing.
The Bank of Japan made no changes to its stimulus program on Thursday and reiterated that inflation will almost reach the bank’s 2% target by 2015.
Elsewhere, the euro ended the week at three-week lows against the yen on Friday as concerns over a possible rate cut by the European Central Bank weighed.
The single currency weakened broadly after data on Thursday showing that euro zone inflation fell to a four year low in October raised concerns that the ECB may ease monetary policy to help shore up growth.
Eurostat said consumer price inflation in the currency bloc slowed to 0.7% in October, the slowest pace since November 2009, from 1.1% in September.
A separate report showed that the euro zone unemployment rate rose to a record high 12.2% in September.
EUR/JPY ended Friday’s session at 133.16, down 0.34% for the day, bringing the week’s losses to 1.08%.
In the week ahead, investors will be awaiting the outcome of Thursday’s ECB policy meeting. On Friday the U.S. is to release the nonfarm payrolls report for October, which will help assess expectations for a possible reduction in Fed stimulus.
Ahead of the coming week, Investing.com has compiled a list of these and other significant events likely to affect the markets.
Monday, November 4
Markets in Japan are to remain closed for a national holiday.
The U.S. is to release data on factory orders, a leading indicator of production.
Tuesday, November 5
In the U.S., the ISM is to release a report on service sector activity.
Wednesday, November 6
The BoJ is to publish the minutes of its most recent policy setting meeting.
Thursday, November 7
The U.S. is to publish a preliminary estimate of third quarter gross domestic product, the broadest indicator of economic activity and the leading indicator of economic growth. Meanwhile, the Labor Department is to release its weekly report on initial jobless claims.
Friday, November 8
The University of Michigan is to release the preliminary reading of its consumer sentiment index. The U.S. is to round up the week with the closely watched government data on nonfarm payrolls and the unemployment rate.
USD/JPY ended Friday’s session at 98.70, 0.34% higher for the day, after falling as low as 97.80 earlier. The pair ended the week 1.09% higher.
The pair was likely to find support at 97.45, the low of October 29 and resistance at 98.99, the high of October 17.
The dollar gained ground after the Institute of Supply Management said its manufacturing purchasing managers’ index rose to 56.4 in October, the highest since April 2011, from 56.2 in September. Economists had expected the index to tick down to 55.0.
The Fed left its USD85 billion-a-month asset purchase program in place following its monthly meeting on Wednesday. The bank gave no clear indication whether it would start scaling back stimulus at the December meeting or continue it into the start of 2014.
"The housing sector has slowed somewhat in recent months," the Fed statement said. However, Fed officials stuck to the view that the economy is expanding "at a moderate pace" and said downside risks were diminishing.
The Bank of Japan made no changes to its stimulus program on Thursday and reiterated that inflation will almost reach the bank’s 2% target by 2015.
Elsewhere, the euro ended the week at three-week lows against the yen on Friday as concerns over a possible rate cut by the European Central Bank weighed.
The single currency weakened broadly after data on Thursday showing that euro zone inflation fell to a four year low in October raised concerns that the ECB may ease monetary policy to help shore up growth.
Eurostat said consumer price inflation in the currency bloc slowed to 0.7% in October, the slowest pace since November 2009, from 1.1% in September.
A separate report showed that the euro zone unemployment rate rose to a record high 12.2% in September.
EUR/JPY ended Friday’s session at 133.16, down 0.34% for the day, bringing the week’s losses to 1.08%.
In the week ahead, investors will be awaiting the outcome of Thursday’s ECB policy meeting. On Friday the U.S. is to release the nonfarm payrolls report for October, which will help assess expectations for a possible reduction in Fed stimulus.
Ahead of the coming week, Investing.com has compiled a list of these and other significant events likely to affect the markets.
Monday, November 4
Markets in Japan are to remain closed for a national holiday.
The U.S. is to release data on factory orders, a leading indicator of production.
Tuesday, November 5
In the U.S., the ISM is to release a report on service sector activity.
Wednesday, November 6
The BoJ is to publish the minutes of its most recent policy setting meeting.
Thursday, November 7
The U.S. is to publish a preliminary estimate of third quarter gross domestic product, the broadest indicator of economic activity and the leading indicator of economic growth. Meanwhile, the Labor Department is to release its weekly report on initial jobless claims.
Friday, November 8
The University of Michigan is to release the preliminary reading of its consumer sentiment index. The U.S. is to round up the week with the closely watched government data on nonfarm payrolls and the unemployment rate.