Forexpros – The U.S. dollar was steady against the yen on Monday, as fresh global growth concerns boosted safe haven demand, although disappointing economic data from Japan limited the yen’s gains.
USD/JPY hit 78.36 during early European trade, the daily high; the pair subsequently consolidated at 78.30, easing up 0.05%.
The pair was likely to find support at 77.90, the low of August 1 and resistance at 78.63, last Friday’s high.
Official data showed earlier that Japan’s economy grew 0.3% in the three months to June, just half as much as expectations for a 0.6% expansion, from an upwardly revised 1.2% in the first quarter as export demand was hit by the euro zone debt crisis.
The data added to speculation that the Bank of Japan may signal the need for further monetary easing in the near future to shore up growth, as investors eyed the minutes of the bank’s most recent policy-setting meeting, expected on Tuesday.
Last week, the BoJ left the size of the JPY70 trillion asset purchase program unchanged and also kept interest rates unchanged at between zero and 0.1%, in a widely anticipated decision.
Japan’s weak GDP report added to concerns over a global economic slowdown after data on Friday showed that Chinese exports grew just 1.0% on the year in July, down from the 11.3% gain seen in June, while imports rose 4.7% year-over-year, down from 6.3% in June.
Meanwhile, sentiment remained mildly supported by hopes the European Central Bank will soon take action to ease the euro zone’s sovereign debt crisis.
The yen was also steady against the euro with EUR/JPY inching 0.06% higher, to hit 96.23.
Neither the euro zone or the U.S. were scheduled to release any significant economic data on Monday, so investors were looking ahead to U.S. data on retail sales and inflation later in the week.
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