Investing.com - The dollar dropped against the yen on Monday after U.S. factory data defied expectations to remain expansive and contracted, renewing fears that the Federal Reserve may hold off on winding down stimulus measures.
Stimulus measures such as the Fed's monthly USD85 billion bond-buying program weaken the greenback to spur recovery.
In U.S. trading on Monday, USD/JPY was trading at 99.12, down 1.30%, up from a session low of 98.87 and off a high of 100.73.
The pair was likely to find resistance at 100.73, the earlier high, and support at 98.87, the earlier low.
The Institute for Supply Management said earlier its manufacturing purchasing managers’ index fell to 49.0 in May from 50.7 in April.
Analysts were expecting an unchanged reading.
On the index, a reading above 50.0 indicates industry expansion, below indicates contraction.
Federal Reserve Chairman Ben Bernanke has said monetary authorities will pay close attention to economic data when deciding the fate of stimulus measures.
Meanwhile in Europe, better-than-expected PMI data strengthened the euro and sent the dollar falling, which bolstered the yen's appeal among those looking for a safe-haven asset class to ride out U.S. uncertainty.
The eurozone's manufacturing PMI improved to 48.3 from 47.8 in April indicating that the slump in the manufacturing sector is easing, according to London-based Markit Economics.
Germany’s manufacturing PMI was revised up to 49.4 in May, beating market calls for a 49.0 reading.
The Japanese currency continued to see support on talk the Bank of Japan will make no changes to the ultra-loose monetary policies of its own.
To stave off deflationary pressures, the Bank of Japan has rolled out massive monetary stimulus measures in recent months, which as a percentage of gross domestic product, are much larger than those undertaken by the Federal Reserve in the U.S.
As a result, the yen has plunged in value this year, though Bank of Japan Governor Haruhiko Kuroda said recently that a stable financial system is just as important to the country as growth-oriented policies, which investors interpreted as a sign that Tokyo may adopt a wait-and-see approach to monetary policy and forgo expanding stimulus programs for now.
The yen, meanwhile, was up against the pound and up against the euro, with GBP/JPY down 0.33% and trading at 152.11 and EUR/JPY trading down 0.57% at 129.77.
On Tuesday, the U.S. will unveil data on the country's trade balance, the difference in value between imports and exports.
Japan is to publish government data on average cash earnings, which is closely linked to consumer spending.
Stimulus measures such as the Fed's monthly USD85 billion bond-buying program weaken the greenback to spur recovery.
In U.S. trading on Monday, USD/JPY was trading at 99.12, down 1.30%, up from a session low of 98.87 and off a high of 100.73.
The pair was likely to find resistance at 100.73, the earlier high, and support at 98.87, the earlier low.
The Institute for Supply Management said earlier its manufacturing purchasing managers’ index fell to 49.0 in May from 50.7 in April.
Analysts were expecting an unchanged reading.
On the index, a reading above 50.0 indicates industry expansion, below indicates contraction.
Federal Reserve Chairman Ben Bernanke has said monetary authorities will pay close attention to economic data when deciding the fate of stimulus measures.
Meanwhile in Europe, better-than-expected PMI data strengthened the euro and sent the dollar falling, which bolstered the yen's appeal among those looking for a safe-haven asset class to ride out U.S. uncertainty.
The eurozone's manufacturing PMI improved to 48.3 from 47.8 in April indicating that the slump in the manufacturing sector is easing, according to London-based Markit Economics.
Germany’s manufacturing PMI was revised up to 49.4 in May, beating market calls for a 49.0 reading.
The Japanese currency continued to see support on talk the Bank of Japan will make no changes to the ultra-loose monetary policies of its own.
To stave off deflationary pressures, the Bank of Japan has rolled out massive monetary stimulus measures in recent months, which as a percentage of gross domestic product, are much larger than those undertaken by the Federal Reserve in the U.S.
As a result, the yen has plunged in value this year, though Bank of Japan Governor Haruhiko Kuroda said recently that a stable financial system is just as important to the country as growth-oriented policies, which investors interpreted as a sign that Tokyo may adopt a wait-and-see approach to monetary policy and forgo expanding stimulus programs for now.
The yen, meanwhile, was up against the pound and up against the euro, with GBP/JPY down 0.33% and trading at 152.11 and EUR/JPY trading down 0.57% at 129.77.
On Tuesday, the U.S. will unveil data on the country's trade balance, the difference in value between imports and exports.
Japan is to publish government data on average cash earnings, which is closely linked to consumer spending.