Investing.com - The U.S. dollar edged higher against the Japanese yen in Asian trade Tuesday, with a positive swing on Wall Street overcoming the release of poor domestic manufacturing data.
In early Asian trade USD/JPY hit 76.76, the pair’s lowest since August 1; the pair subsequently consolidated at 76.88, addling 0.04%.
The pair was likely to find support at 76.31, last Thursday’s low, and resistance at 77.22, Thursday’s high.
Markets were greeted Monday by a report from the U.S. Federal Reserve Bank of New York that its index of manufacturing conditions declined in August, falling 3.9 points to minus 7.7. July’s figure came in at 3.8.
The New York Fed’s Empire State manufacturing index, which measures economic health in the manufacturing sector by surveying about 200 manufacturers in New York State, had been expected to improve slightly to minus 0.4.
Despite the figures, Wall Street posted its third straight winning session, boosted by merger news and an 8% jump in shares from Dow Jones component Bank of America.
The Dow closed up up 1.9%, to close at 11,182.90. The tech-heavy Nasdaq Composite Index rose 1.9% to 2,555.20, and the S&P 500 gained 2.1% to 1,204.49.
Meanwhile, Japan’s gross domestic product shrank by 0.3% in the quarter ending June, according to figures released over the weekend by the Japanese Census Bureau. Economists forecasts were for Japan’s GDP to fall by twice that rate at 0.6% due to the lingering effects of the March 11 earthquake and tsunamis.
The Japanese economy contracted by 3.6% in the January to March quarter.
The yen has strengthened from its level on August 4 when the Bank of Japan intervened in the market to weaken the currency. Japanese exporters see diminished profits when the yen gains against its counterparts as earnings must be repatriated back into local currency.
Meanwhile the yen moved lower against the euro but gained against the British pound with EUR/JPY up 0.03% to hit 111.03, and GBP/JPY falling 0.07% to hit 125.83.
Japan’s Finance Ministry was to release its latest trade balance numbers on Wednesday, an indication of export conditions and domestic demand.