Investing.com - The dollar ended the week higher against the yen on Friday, after U.S. economic data indicated that the recovery will continue to deepen going into this year, fuelling expectations that the Federal Reserve will continue to taper its stimulus program.
Data released on Friday showed that U.S. industrial production rose 0.3% in December, in line with expectations, rising for the fifth successive month.
Another report showed that U.S. housing starts fell 9.8% last month, more than the 8.3% decline forecast by analysts. U.S. building permits rose less-than-expected in December, but remained close to November's five year highs.
Separately, data showed that the University of Michigan's consumer sentiment index ticked down to 80.4 in January from 82.5 in December. Analysts had expected the index to rise to 83.5.
USD/JPY touched session lows of 104.20 on Friday and was last down just 0.02% to 104.31. For the week, the pair gained 1.17%.
The pair was likely to find support at 103.75 and resistance at 105.00.
Earlier in the week, data showed that U.S. retail sales posted a larger than expected gain in December.
The data indicated that while the recovery in the U.S. remains uneven, the economic outlook is continuing to improve. The dollar has strengthened broadly since the Fed announced its decision in December to scale back its asset purchase program, cutting it by USD10 million, to USD75 billion-per-month.
Elsewhere, the yen was higher against the euro on Friday, with EUR/JPY down 0.61% to 141.26 at the close of trade.
Sentiment on the euro was hit by concerns that the subdued inflation outlook may prompt the European Central Bank to ease monetary policy in order to safeguard the fragile recovery in the region.
In the week ahead, Wednesday's monetary policy decision by the Bank of Japan will be in focus, while U.S. data on jobless claims and home sales will also be closely watched.
Ahead of the coming week, Investing.com has compiled a list of these and other significant events likely to affect the markets. The guide skips Tuesday and Friday as there are no relevant events on these days.
Monday, January 20
Markets in the U.S. are to remain closed for the Martin Luther King Day holiday.
Wednesday, January 22
The Bank of Japan is to announce its benchmark interest rate and publish its monetary policy statement, which outlines economic conditions and the factors affecting the bank's decision. The announcement is to be followed by a press conference.
Thursday, January 23
The U.S. is release the weekly report on initial jobless claims and a private sector report on existing home sales.
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