Investing.com - The Japanese yen and Australian dollar were a touch stronger on Friday after consumer price data from Tokyo came in as expected.
Japan's national CPI data for June rose 3.3% for the July core figure which excludes perishables but includes energy, in line with expectations and a 13th straight year-on-year rise, but a slower pace than the 3.4% increase in May.
Also, Japan's June service producer price index rose 3.6%, unchanged from June.
USD/JPY traded at 101.75, down 0.06%, after the data, while AUD/USD traded at 0.9421, up 0.03%.
The Japan inflation data is a key focus in the central bank's efforts to reach 2% sustained inflation by 2015 via aggressive monteary easing accompanied by government economic reforms.
Overnight, the dollar traded higher against most major currencies, buoyed by data that revealed first-time jobless assistance claims fell to eight-year lows, though upbeat factory gauges in Europe sent the euro taking back earlier losses against the greenback.
The U.S. Department of Labor reported earlier that the number of individuals filing for initial jobless benefits in the week ending July 19 declined by 19,000 to 284,000, down from the previous week’s total of 303,000.
Analysts had expected jobless claims to rise by 5,000 to 308,000 last week, and the positive numbers fueled speculation that the Federal Reserve may hike interest rates sooner than markets once anticipated.
While the Fed is seen closing its monthly bond-buying stimulus program likely in October, uncertainty as to how much time will pass from that point until rate hikes begin makes the dollar move on both positive and negative indicators.
A separate report showed that U.S. new home sales dropped by 8.1% to 406,000 units last month, worse than expectations for a decline of 5.3%, pointing to underlying weakness in the housing sector, which capped the dollar's advance along with cheery European factory data.
A preliminary reading of the euro zone manufacturing purchasing managers’ index rose to a two-month high of 51.9 for July, beating market calls for a 51.7 reading. The bloc’s services PMI jumped to a 38-month high of 54.4, beating expectations for a 52.7 reading.
Private sector activity in Germany also expanded in July, with the country’s services PMI jumping to a 37-month high. The French service sector also expanded this month, but the contraction in the country's manufacturing sector deepened.
Ongoing concerns that conflicts in Ukraine and Gaza will dampen global economic recovery weighed on both currencies.
The US Dollar Index, which tracks the performance of the greenback versus a basket of six other major currencies, fell 0.02% to 80.93.
On Friday, the U.S. is to round up the week with data on durable goods orders.