Investing.com - The dollar firmed against the yen on Thursday after data revealed that U.S. retailers enjoying a bustling November, which boosted hopes for a profitably holiday shopping season that will stoke economic recovery.
In U.S. trading, USD/JPY was up 1.32% at 119.38, up from a session low of 117.45 and off a high of 119.49.
The pair was expected to test support at 117.22, the low from Nov. 27, and resistance at 121.86, Monday's high.
The U.S. Commerce Department reported earlier that retail sales rose 0.7% last month, beating expectations for a gain of 0.4%.
October's retail sales growth figure was revised up to 0.5% from 0.3%.
Rising retail sales over time correlate with stronger economic growth, while weaker sales signal a declining economy.
Core retail sales, which exclude volatile transportation items, advanced 0.5% in November, easily surpassing forecasts for a 0.1% increase. Core sales in October rose by 0.4%.
Retail sales correspond closely with the consumer spending component of the government's gross domestic product report. Consumer spending accounts for as much as 70% of U.S. economic growth.
Thursday's retail sales numbers boosted expectations for the Federal Reserve to hike interest rates earlier in 2015 than once anticipated, possibly in the middle of the year, which gave the dollar support over the yen.
Elsewhere, the U.S. Department of Labor reported that the number of individuals filing for initial jobless benefits in the week ending Dec. 6 fell by 3,000 to 294,000, beating market calls for and increase to 299,000, which also supported the dollar by boosting optimism over the health of the U.S. labor market.
The number of Americans applying for new jobless benefits has held below the 300,000-level for 12 out of the past 13 weeks.
Continuing jobless claims in the week ended Nov. 29 rose to 2.514 million from 2.372 million in the preceding week. Analysts had expected continuing claims to fall to 2.360 million.
The four-week moving average was 299,250, an increase of 250 from the previous week’s total of 299,000. The monthly average is seen as a more accurate gauge of labor trends because it reduces volatility in the week-to-week data.
Separately, the yen was down against the euro and down against the pound, with EUR/JPY up 0.89% at 147.99, and GBP/JPY trading up 1.30% at 187.58.
On Friday, the U.S. is to round up the week with data on producer prices and a preliminary report on consumer sentiment.