Investing.com - The dollar fell to more than two week lows against the yen on Friday as escalating geopolitical tensions bolstered safe haven demand, before retracing most of its losses late in the session.
USD/JPY ended Friday’s session down 0.06% at 102.03, after falling to a more-than two week low of 101.50 earlier in the day. The pair ended the week with losses of 0.53%.
The pair is likely to find support at around the 101.40 level and resistance at 102.60.
The drop in the dollar came after the U.S. launched airstrikes in Iraq, in a bit to halt the advance of extremists in the country’s north, while a breakdown in the ceasefire between Israel and Gaza also soured market sentiment.
The dollar later trimmed back losses as fears over hostilities between Russia and Ukraine eased after Russia’s defense ministry said it had concluded military exercises it was holding close to the border with Ukraine.
In the U.S., data on Friday showed that wholesale inventories rose by a smaller than forecast 0.3% in June.
Elsewhere Friday, the yen ended lower against the euro, with EUR/JPY rising 0.31% to 136.83, paring the week’s losses to 0.65%.
On Thursday, European Central Bank President Mario Draghi indicated that the bank was pleased with the weaker exchange rate for the euro, which should help to bolster inflation and shore up exports.
He also played down concerns over the recent slowdown in inflation, saying it is mostly due to energy prices.
In the week ahead, investors will be continuing to monitor geopolitical risk. Wednesday’s preliminary data on second quarter growth from Japan and the U.S. report on retail sales will also be in focus.
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 as there are no relevant events on this day.
Monday, August 11
Japan is to release data on tertiary industry activity.
Wednesday, August 13
The Bank of Japan is to publish the minutes of its latest policy meeting, which contain valuable insights into economic conditions from the bank’s perspective.
Japan is to publish preliminary data on gross domestic product, the broadest indicator of economic activity and the leading measure of the economy’s health.
The U.S. is to publish data on retail sales, the government measure of consumer spending, which accounts for the majority of overall economic activity.
Thursday, August 14
Japan is to publish data on core machinery orders.
The U.S. is to release the weekly report on initial jobless claims.
Friday, August 15
The U.S. is to round up the week with reports on manufacturing activity in New York state and industrial output, as well as preliminary data on consumer sentiment.