Forexpros – The U.S. dollar ended the week lower against the yen on Friday, as the pair continued to trade in a narrow range amid concerns over a fresh intervention by Japan to weaken the yen.
USD/JPY hit 77.25 on Monday, the pair’s highest since September 15; the pair subsequently consolidated at 76.70 by close of trade on Friday, shedding 0.48% over the week.
The pair is likely to find support at 76.25, the low of September 27 and resistance at 77.25, the high of October 3.
Concerns over the financial crisis in the euro zone reemerged on Friday after ratings agency Fitch downgraded its rating for Italy to A+ from AA-, and cut Spain’s rating to AA- from AA+, sparking concerns over the countries’ ability to borrow in international markets.
Earlier in the day, risk appetite was boosted after the U.S. Department of Labor said nonfarm payrolls rose by 103,000 in September, far more than the expected 53,000 gain, while payrolls for the previous two months were revised up by a total of 99,000.
Earlier in the week, Federal Reserve Chairman Ben Bernanke said that the U.S. economic recovery has been far less robust that the Fed had hoped, adding that the central bank was ready to do more to help the U.S. economy.
The dollar rose to a twelve-day high against the yen on Monday, after the U.S. Institute for Supply Management said its index of purchasing managers rose more-than-expected in September, as production and employment increased.
But the greenback erased gains as ongoing concerns over the euro zone and a potential Greek default supported safe haven demand for the yen.
Japan’s Finance Minister Jun Azumi reiterated a warning against speculators pushing the yen too high, saying the recent moves by the euro against the yen were excessive.
Also last week, the Bank of Japan left interest rates unchanged at nearly zero and extended by six months an emergency loan program for disaster-hit regions.
In the coming week, developments in the euro zone look likely to remain in the spotlight. Meanwhile, investors will be looking towards Friday’s U.S. data on retail sales to gauge the strength of the U.S. economic recovery.
The Bank of Japan’s monthly report will also be in focus.
Ahead of the coming week, Forex Pros has compiled a list of these and other significant events likely to affect the markets.
Monday, October 10
In Japan, markets are to remain closed for a national holiday.
In the U.S., debt markets will remain closed for the Columbus Day holiday, while stock markets will be open as usual.
Tuesday, October 11
The Bank of Japan is to release its monthly report, which gives investors a detailed insight into current and future economic conditions from the bank’s perspective.
Later in the day, the U.S. is to publish data on economic optimism.
Wednesday, October 12
Japan is to release government data on machinery orders, a leading indicator of manufacturing production.
Also Wednesday, the Federal Reserve is to publish the minutes of its most recent policy-setting meeting.
Thursday, October 13
The BoJ is to publish the minutes of its most recent policy-setting meeting. Meanwhile, Japan is to publish official data on tertiary industry activity, a leading indicator of economic health.
Later in the day, the U.S. is to release its weekly government report on initial jobless claims, as well as data on crude oil stockpiles, the federal budget balance and the trade balance.
Friday, October 14
The U.S. is to round up the week with official data on retail sales, the foremost indicator of consumer spending, which accounts for the majority of overall economic activity.
The U.S. is also to publish official data on import prices and business inventories. In addition, the University of Michigan is to publish preliminary data on consumer sentiment and inflation expectations.
Also Friday, the G20 Group is to hold the first day of a two-day summit meeting.
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