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USD/JPY drops on soft Chinese industrial output data

Published 03/13/2014, 12:04 PM
Updated 03/13/2014, 12:05 PM
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Investing.com - Disappointing Chinese industrial output figures sent investors snapping up safe-haven yen positions on Thursday, avoiding the dollar in the process despite solid U.S. retail sales and weekly jobless claims reports.

In U.S. trading, USD/JPY was down 0.45% and trading at 102.31, up from a session low of 102.22 and off a high of 102.87.

The pair was expected to test support at 101.20, the low from March 3, and resistance at 103.42, Tuesday's high.

Data revealing cooling Chinese industries sent investors rushing to the yen.

Chinese industrial production rose 8.6% in the first two months of 2014, according to data released on Thursday, missing market expectations for a 9.5% increase, while Chinese retail sales rose by 11.8%, beneath market forecasts for a 13.5% gain.

The numbers sparked demand for safe-haven asset classes, the yen more than the dollar despite better-than-expected retail sales and jobless claims reports.

The Commerce Department reported that U.S. retail sales rose 0.3% in February, ending two months of declines and better than market expectations for a 0.2% increase.

Core retail sales, which exclude automobile sales, also rose 0.3% last month, ahead of expectations for a 0.2% rise.

Separately, the Department of Labor said the number of individuals filing new claims for unemployment benefits in the U.S. fell by 9,000 to a three-month low of 315,000 last week.

Analysts had expected initial jobless claims to rise by 6,000 last week.

The yen, meanwhile, was up against the euro and up against the pound, with EUR/JPY down 0.44% at 142.25, and GBP/JPY trading down 0.27% at 170.33.

On Friday, the U.S. is to round up the week with data on producer price inflation and preliminary data from the University of Michigan on consumer sentiment.

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