Investing.com - The U.S. dollar held near the highest level
since August 2010 against the yen on Friday, as
weaker-than-expected Japanese economic data fanned speculation the
Bank of Japan will introduce further stimulus measures to boost
economy activity and combat deflation.
USD/JPY hit 86.63 on Friday, the pair's highest since August 3,
2010; the pair subsequently consolidated at 85.88 by close of
trade, 1.93% higher for the week.
The pair is likely to find support at 85.21, Wednesday's low and
resistance at 86.63, Friday's high and a 28-month high.
Official data released Friday showed that Japan's industrial output
fell by 1.7% in November, worse-than-expectations for a 0.5%
decline.
A separate report showed that consumer prices fell 0.1% in November
from a year earlier.
The yen has come under heavy selling pressure in recent weeks on
expectations that newly elected Japanese Prime Minister Shinzo Abe
will push for more monetary easing by the Bank of Japan.
On Thursday, new Finance Minister Taro Aso said that Abe has
ordered him to compile a stimulus package without adhering to a
previously agreed cap on new bond issuance.
Abe has recently called for unlimited easing in order to weaken the
local currency and spur growth in the recession-hit economy.
Meanwhile, market players continued to monitor developments
surrounding the fiscal cliff in the U.S., approximately USD600
billion in automatic tax hikes and spending cuts due to come into
effect on January 1 unless Democrats and Republicans agree how to
cut the deficit.
U.S. President Barack Obama met with congressional leaders at the
White House Friday afternoon, but both sides failed to reach an
agreement ahead of the looming year-end deadline.
The gathering included House Speaker John Boehner and Senate
Minority Leader Mitch McConnell, both Republicans, as well as
Senate Majority Leader Harry Reid and House Minority Leader Nancy
Pelosi, both Democrats.
The House of Representatives is due to return to Washington on
Sunday. The Senate will be in Sunday as well to try to reach a
last-ditch agreement.
Without a deal, the U.S. could fall back into recession and drag
much of the world down with it.
On the data front, the National Association of Realtors said Friday
that U.S. pending home sales rose 1.7% in November, above
expectations for a 1% increase.
A separate report showed that Chicago's purchasing managers' index
rose to 51.6 in December, from a reading of 50.4 the previous
month, beating expectations for a rise to 51.0.
In the week ahead trading volumes are expected to remain light
because many traders have closed books to lock in profit before the
end of the year, reducing liquidity in the market and increasing
the volatility.
Meanwhile, U.S. is to publish its closely-watched monthly jobs
report on Friday, as investors attempt to gauge the strength of the
country's economic recovery.
Ahead of the coming week, Investing.com has compiled a list of
these and other significant events likely to affect the markets.
Monday, December 31
Markets in Japan will remain closed for New Year's Eve.
Tuesday, January 1
Markets in the U.S. and Japan will remain shut in observance of New
Year's Day.
Wednesday, January 2
Markets in Japan will remain closed for a bank holiday.
Meanwhile, the Institute of Supply Management is to produce a
report on manufacturing growth in the U.S., a leading indicator of
economic health.
Thursday, January 3
Markets in Japan will remain closed for a bank holiday.
Later Thursday, the U.S. is to release a report on ADP nonfarm
payrolls, as well as its weekly government report on initial
jobless claims. In addition, the Federal Reserve is to publish the
minutes of its most recent policy-setting meeting.
Friday, January 4
The U.S. is to round up the week with official data on nonfarm
payrolls, the foremost gauge of job creation, as well as data on
the overall unemployment rate.
The country is also to release official data on factory orders,
crude oil stockpiles and natural gas inventories. In addition, the
ISM is to produce a report on service sector activity.
Investing.com -
Investing.com
offers an extensive set of professional tools for the Forex,
Commodities, Futures and the Stock Market including real-time data
streaming, a comprehensive economic calendar, as well as financial
news and technical & fundamental analysis by in-house experts.
Read more News on Investing.com or Follow us on Twitter at @
Newsinvesting