Investing.com - The U.S. dollar rose above 90.00 against the yen for the first time in more than two-and-a-half years on Friday, as expectations for more easing by the Bank of Japan continued to pin down the yen.
USD/JPY hit 87.78 on Wednesday, the pair's lowest since January 9; the pair subsequently consolidated at 90.07 by close of trade on Friday, up 0.87% for the week.
The pair is likely to find support at 88.12, Thursday's low and resistance at 92.10, the high of June 14 2010.
The yen weakened broadly amid expectations that the BoJ will implement more aggressive easing measures at its upcoming policy meeting on Tuesday in response to growing political pressure from Prime Minister Shinzo Abe to step up efforts to combat deflation.
The yen had rebounded earlier in the week after Japan's Economy Minister Akira Amari said an excessively weak yen could have a negative impact on the economy by pushing up import prices.
Elsewhere, the euro eased back from 20-month highs against the yen on Friday, with EUR/JPY slipping 0.25% to settle at 119.90 as sentiment on the single currency was hit by renewed concerns over the outlook for the euro zone economy.
The Bank of Italy said Friday that the country's economy would contract by 1% this year. Earlier in the week, Germany's Economy Ministry cut its forecast for growth to 0.4% in 2013, down from its previous forecast for 1% growth.
Meanwhile, data showing that China's economy expanded more-than-forecast in the fourth quarter was offset by weaker-than-forecast data on U.S. consumer confidence.
Beijing said the world's second largest economy expanded by 7.9% year-on-year in the three months to December, above expectations for 7.8% growth.
Safe haven demand received a boost after data showed that the University of Michigan's U.S. consumer confidence index unexpectedly dropped from 72.9 to 71.3 in January, its lowest level since December 2011, compared to expectations for an improvement to 75.0.
Consumer sentiment was hit by ongoing concerns over the U.S. debt ceiling debate.
In the week ahead, investors will be closely watching the outcome of Tuesday's BoJ policy meeting. Meanwhile, markets in the U.S. are to remain closed for a national holiday on Monday.
Ahead of the coming week, Investing.com has compiled a list of these and other significant events likely to affect the markets.
Monday, January 21
Markets in the U.S. are to remain closed on Monday for Martin Luther King Day.
Tuesday, January 22
The BoJ is to announce its benchmark interest rate. The rate announcement is to be accompanied by the bank's rate statement, which contains important insights into current and future economic conditions from the bank's perspective. The central bank is to hold a press conference to discuss the monetary policy decision after the rate announcement.
The U.S. is to publish private sector data on existing home sales, a leading indicator of economic health.
Also Tuesday, the World Economic Forum is to begin its annual meeting in Davos, Switzerland.
Wednesday, January 23
The U.S. is to release government data on crude oil stockpiles.
The World Economic Forum is to continue for a second day in Davos, Switzerland.
Thursday, January 24
Japan is to publish official data on the trade balance, the difference in value between imports and exports.
The U.S. is to publish the weekly government report on initial jobless claims, as well as preliminary data on manufacturing activity.
The World Economic Forum is to continue for a third day in Davos, Switzerland.
Friday, January 25
Japan is to release government data on consumer inflation, which accounts for the majority of overall inflation. Meanwhile, the BoJ is to publish the minutes of its most recent policy meeting.
The U.S. is to round up the week with government data on new homes sales, a leading indicator of economic health.
The World Economic Forum is to continue for a fourth day in Davos, Switzerland.
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