Investing.com - The dollar fell against the yen on Thursday after weak retail sales numbers sent investors ditching the U.S. currency on expectations for a gradual end to monetary stimulus programs that soften the greenback to spur recovery.
In U.S. trading, USD/JPY was down 0.33% and trading at 102.19, up from a session low of 101.70 and off a high of 102.57.
The pair was expected to test support at 100.75, the low from Feb. 4, and resistance at 102.70, Tuesday's high.
The Commerce Department reported earlier that U.S. retail sales fell 0.4% in January, confounding expectations for a 0.3% increase. December’s figure was revised down to a decline of 0.1% from a previously reported 0.2% increase.
Core retail sales came in flat in January compared to expectations for a 0.1% rise.
The soft data fueled worries that U.S. economic recovery still faces headwinds, and that the Federal Reserve will take its time dismantling its USD65 billion monthly bond-buying program.
Fed asset purchases weaken the dollar by suppressing interest rates, which tends to bolster assets like stocks and commodities.
While investors recognized that inclement winter weather may have bruised the data as opposed to waning demand, the dollar fell anyway on sentiments that a string of winter storms may have been strong enough to make a broader dent in recovery.
Elsewhere, the Department of Labor reported that the number of individuals who filed for unemployment assistance in the U.S. last week rose by 8,000 to 339,000 from the previous week’s total of 331,000.
Analysts had expected jobless claims to fall by 1,000.
The yen, meanwhile, was down against the euro and up against the pound, with EUR/JPY up 0.20% at 139.64, and GBP/JPY trading down 0.09% at 170.00.
On Friday, the U.S. is to wrap up the week with the closely watched preliminary reading of the Thomson Reuters/University of Michigan consumer sentiment index. The U.S. is also to release data on import prices and industrial production.