Investing.com - The dollar rose against the yen on Wednesday after U.S. wholesale pricing data and a New York state factory report beat expectations and fueled demand for the dollar on expectations the Federal Reserve will continue to taper its stimulus programs.
In U.S. trading, USD/JPY was up 0.35% and trading at 104.58, up from a session low of 104.09 and off a high of 104.70.
The pair was expected to test support at 102.86, Monday's low, and resistance at 105.31, Friday's high.
The Federal Reserve Bank of New York said that its general business conditions index jumped to 12.51 in January from an upwardly revised 2.22 in December. Analysts were expecting the index to rise to only 3.75.
Elsewhere, U.S. wholesale prices beat expectations and firmed the dollar as well.
The U.S. producer price index rose 0.4% in December, the biggest increase since June, recovering from a 0.1% decline in November and was also up 1.2% from a year earlier.
Core PPI was up 0.3% in December and rose 1.4% on a year-over year basis, compared to expectations for a monthly increase of 0.1% and an annual gain of 1.3%.
The solid data convinced investors that the Federal Reserve will wind down its USD75 billion in monthly bond purchases as the year progresses.
Bond purchases weaken the dollar by driving down long-term interest rates, and talk of their dismantling tends to strengthen the greenback.
Wednesday's economic indicators were the latest convincing investors that the poor December jobs report was likely a hiccup on the road to recovery.
On Tuesday, the Commerce Department reported that U.S. retail sales rose 0.2% in December, beating expectations for a 0.1% increase.
Core retail sales, which exclude automobile sales, expanded by 0.7% in December, well above forecasts for a 0.4% increase.
Also giving the dollar support, the Federal Reserve released its Beige Book earlier, which said the U.S. economy continues to expand at a moderate pace.
The yen, meanwhile, was up against the euro and up against the pound, with EUR/JPY trading down 0.22% at 142.26, and GBP/JPY trading down 0.08% at 171.17.
On Thursday, the U.S. is to publish reports on consumer price inflation and initial jobless claims, in addition to data on manufacturing activity in Philadelphia. Meanwhile, Federal Reserve Chairman Ben Bernanke is to speak at an event in Washington.
In U.S. trading, USD/JPY was up 0.35% and trading at 104.58, up from a session low of 104.09 and off a high of 104.70.
The pair was expected to test support at 102.86, Monday's low, and resistance at 105.31, Friday's high.
The Federal Reserve Bank of New York said that its general business conditions index jumped to 12.51 in January from an upwardly revised 2.22 in December. Analysts were expecting the index to rise to only 3.75.
Elsewhere, U.S. wholesale prices beat expectations and firmed the dollar as well.
The U.S. producer price index rose 0.4% in December, the biggest increase since June, recovering from a 0.1% decline in November and was also up 1.2% from a year earlier.
Core PPI was up 0.3% in December and rose 1.4% on a year-over year basis, compared to expectations for a monthly increase of 0.1% and an annual gain of 1.3%.
The solid data convinced investors that the Federal Reserve will wind down its USD75 billion in monthly bond purchases as the year progresses.
Bond purchases weaken the dollar by driving down long-term interest rates, and talk of their dismantling tends to strengthen the greenback.
Wednesday's economic indicators were the latest convincing investors that the poor December jobs report was likely a hiccup on the road to recovery.
On Tuesday, the Commerce Department reported that U.S. retail sales rose 0.2% in December, beating expectations for a 0.1% increase.
Core retail sales, which exclude automobile sales, expanded by 0.7% in December, well above forecasts for a 0.4% increase.
Also giving the dollar support, the Federal Reserve released its Beige Book earlier, which said the U.S. economy continues to expand at a moderate pace.
The yen, meanwhile, was up against the euro and up against the pound, with EUR/JPY trading down 0.22% at 142.26, and GBP/JPY trading down 0.08% at 171.17.
On Thursday, the U.S. is to publish reports on consumer price inflation and initial jobless claims, in addition to data on manufacturing activity in Philadelphia. Meanwhile, Federal Reserve Chairman Ben Bernanke is to speak at an event in Washington.