Forex - Yen retains weakness as wages data disappoints, Aussie down

Investing.com - The Japanese yen retained earlier weakness on Friday after a slew of data that showed an economy struggling to reach a central bank target of 2% sustained inflation.

The data was part of a busy suite due at the end of the week from around the region, even with many countries marking the May 1 labor day, including China which still posted official manufacturing figures as well as services.

USD/JPY changed hands at 119.68, up 0.25%,while AUD/USD traded at 0.7896, down 0.13%, even after better than expected China official manufacturing data. EUR/USD was down to 1.1211, off 0.12%.

In Japan, core consumer prices rose 2.2% year-on-year in March, a touch higher than the 2.1% seen. As well, the jobless rate ticked down to 3.4%, better than the 3.5% expected.

But household spending dropped for the 12th straight time, falling 10.6%, although better than the 12.1% drop forecast by analysts.

Official China manufacturing data for April held at 50.1, better than an expected show, and just at the expansion zone. Non manufacturing, or services fell to 53.4 in April from 53.7 in March.

In Australia, producer prices rose 0.5% quarter-on-quarter, above the 0.2% 0.2% quarter-on-quarter gain expected.

In Japan wages data showed a gain of 0.1%, well below the 0.4% expected for March year-on-year.

The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, jumped 0.15% to 95.01.

Overnight, the dollar remained moderately lower against a basket of other major currencies on Thursday, after mostly positive U.S. economic reports as the Federal Reserve's latest policy statement continued to weigh on the greenback.

The Department of Labor reported that the number of individuals filing for initial jobless benefits in the week ending April 25 fell by 34,000 to a 15-year low 262,000 from the previous week’s total of 296,000. Analysts had expected initial jobless claims to fall by 6,000 to 290,000 last week.

Separately, the Commerce Department said that U.S. personal spending inched up 0.4% last month, below expectations for a gain of 0.5%. Personal spending rose 0.2% in February.

The report also showed personal income was flat in March, missing forecasts for a 0.2% increase and after gaining 0.4% in February.

In addition, market research group Kingsbury International said its Chicago purchasing managers’ index improved by 6.0 points to 52.3 this month from a reading of 46.3 in March. Analysts had expected the index to rise to 50.0 in April.

The U.S. dollar had weakened after the Federal Reserve on Wednesday cited weakness in the U.S. economy and said it will take into account labor market conditions, inflationary pressures and expectations of international financial developments to decide on the timing of a rate increase.

The single currency strengthened after data showed that the euro zone's consumer price inflation was flat this month, compared to expectations for a decline of 0.1% and following a drop of 0.1% in March.

The rate has now been below 1% for 18 straight months, well under the European Central Bank's target of near but just under 2%.

A separate report showed that the bloc's unemployment rate held steady at 11.3% last month, the lowest level since June 2012. Analysts had expected the jobless rate to fall to 11.2% in March.