Investing.com - The yen fell to two-week lows against the dollar on Friday after comments by China’s premiere indicating that the country is ready to make moves to stimulate its economy dampened safe haven demand for the Japanese currency.
USD/JPY rose 0.64% to end Friday’s session at 102.83, the highest since March 12. For the week, the pair gained 0.57%.
The pair is likely to find support at 102.02, Friday’s low and resistance at 103.41, the high of March 11.
Risk appetite was boosted after China's premier Li Keqiang said the country has policies in place to counter economic volatility. The remarks eased concerns over recent signs of a slowdown in the world’s second-largest economy.
Data on Friday showing that U.S. consumer spending rose 0.3% last month after a downwardly revised gain of 0.2% in January also lifted the dollar higher against the yen.
A separate report showed that the University of Michigan’s consumer sentiment index slipped to 80 in March, down from 81.6 the month before. It was higher than the preliminary March reading of 79.9 but below forecasts of 80.5.
Earlier Friday, reports showed that the annual rate of consumer inflation in Japan rose 1.3% in February, indicating that the Bank of Japan’s stimulus program aimed at combatting deflation is working.
However, another report showed that household spending fell 2.5% in February, against expectations for a 0.1% increase.
Elsewhere, the euro was also higher against the yen on Friday, with EUR/JPY advancing 0.71% to 141.40, up from an almost one-month trough of 139.95.
The euro’s gains looked likely to be held in check after European Central Bank officials indicated earlier in the week that they are considering fresh policy options to stave off the risk of deflation in the region.
Data on Friday showing that the annual rate of inflation in Spain slipped 0.2% in March fuelled concerns that deflation could threaten the economic recovery in the euro area. A separate report showed that the annual rate of inflation in Germany slowed in March.
In the week ahead, investors will be looking to Friday’s U.S. nonfarm payrolls report for March for further indications on the strength of the labor market. Japan is to release data on industrial production.
Monday, March 31
Japan is to release preliminary data on industrial production.
Tuesday, April 1
Japan is to publish its Tankan manufacturing and non-manufacturing index, as well as data on average cash earnings.
The Institute of Supply Management is to publish a report on U.S. manufacturing growth.
Wednesday, April 2
The U.S. is to release the ADP report on private sector job creation, which leads the government’s nonfarm payrolls report by two days. The U.S. is also to release data on factory orders.
Thursday, April 3
The U.S. is to publish data on the trade balance, as well as the weekly report on initial jobless claims. Meanwhile, the ISM is to publish a report service sector activity.
Friday, April 4
The U.S. is to round up the week with the closely watched government data on nonfarm payrolls and the unemployment rate.
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