Investing.com - The dollar plunged against the yen on Monday as investors sought safety in the Japanese currency ahead of the release of Tuesday's U.S. retail sales figures, which could shed more light on the direction of U.S. monetary policy.
In U.S. trading, USD/JPY was down 0.92% and trading at 103.21, up from a session low of 102.99 and off a high of 104.14.
The pair was expected to test support at 102.50, the low from Dec. 17, and resistance at 105.31, Friday's high.
The Bureau of Labor Statistics on Friday reported that the U.S. economy added 74,000 jobs in December, well below expectations for a 196,000 increase and below an upwardly revised 241,000 rise the previous month.
The report also showed that the U.S. unemployment rate fell to 6.7% in December due to a weak participation rate, down from 7.0% in November. Analysts had expected the rate to remain unchanged last month.
The numbers weakened the dollar by fueling expectations for the Federal Reserve to trim its USD75 billion monthly bond-buying program at a slower pace than once expected, though by Monday, sentiments grew that overall, the U.S. economy continues to recover and still remains in less need of monetary support.
Fed asset purchases tend to weaken the dollar by suppressing long-term interest rates, and expectations for further tapering of such ultra-loose policies tend to strengthen the greenback.
Still, the dollar came under pressure against the yen ahead of Tuesday's release of U.S. retail sales, with concerns that a disappointing figure just days after a poor jobs report will increase the chances of a more gradual Fed tapering.
The yen, meanwhile, was up against the euro and up against the pound, with EUR/JPY trading down 1.03% at 140.94, and GBP/JPY trading down 1.55% at 169.05.
On Tuesday, expect the pair to move upon release of U.S. retail sales data.
In U.S. trading, USD/JPY was down 0.92% and trading at 103.21, up from a session low of 102.99 and off a high of 104.14.
The pair was expected to test support at 102.50, the low from Dec. 17, and resistance at 105.31, Friday's high.
The Bureau of Labor Statistics on Friday reported that the U.S. economy added 74,000 jobs in December, well below expectations for a 196,000 increase and below an upwardly revised 241,000 rise the previous month.
The report also showed that the U.S. unemployment rate fell to 6.7% in December due to a weak participation rate, down from 7.0% in November. Analysts had expected the rate to remain unchanged last month.
The numbers weakened the dollar by fueling expectations for the Federal Reserve to trim its USD75 billion monthly bond-buying program at a slower pace than once expected, though by Monday, sentiments grew that overall, the U.S. economy continues to recover and still remains in less need of monetary support.
Fed asset purchases tend to weaken the dollar by suppressing long-term interest rates, and expectations for further tapering of such ultra-loose policies tend to strengthen the greenback.
Still, the dollar came under pressure against the yen ahead of Tuesday's release of U.S. retail sales, with concerns that a disappointing figure just days after a poor jobs report will increase the chances of a more gradual Fed tapering.
The yen, meanwhile, was up against the euro and up against the pound, with EUR/JPY trading down 1.03% at 140.94, and GBP/JPY trading down 1.55% at 169.05.
On Tuesday, expect the pair to move upon release of U.S. retail sales data.