Investing.com - The U.S. dollar moved higher against the yen on Friday as concerns over escalating violence in Iraq fuelled safe haven demand while heightened expectations for more stimulus from the Bank of Japan weighed on the yen.
USD/JPY was up 0.28% to 101.99 late Friday from 101.59 on Thursday. For the week, the pair was down 0.49%.
The pair is likely to find support at 101.59, Thursday’s low and resistance at 102.50.
Concerns over the ongoing Sunni insurgency in Iraq hit market sentiment on Friday, amid fears over the impact of reduced oil supply on global growth.
The escalating violence in Iraq overshadowed a report showing that U.S. consumer sentiment unexpectedly deteriorated in June.
The preliminary reading of the University of Michigan's consumer sentiment index for June came in at 81.2, down from 81.9 in May, missing expectations for an uptick to 83.0.
Earlier Friday, the Bank of Japan kept monetary policy steady and indicated that the economy was on course to meet its inflation target next year without additional monetary easing.
The central bank said the economy was showing signs of having weathered a sales tax increase that came into effect on April 1 and added that its expected a gentle recovery to continue.
Analysts remain concerned that a slowdown in growth in the second quarter could prompt additional easing by the BoJ.
Elsewhere, the euro edged higher against the yen on Friday, with EUR/JPY rising 0.26% to 138.18, not far from the four month low of 137.71 struck in the previous session. For the week, the pair lost 0.81%.
The single currency has weakened broadly since the European Central Bank cut rates to record lows earlier this month, in order to combat the threat of persistently low inflation in the euro area.
In the week ahead, investors will be focusing on the outcome of Wednesday’s Federal Reserve policy meeting, while a speech by BoJ Governor Haruhiko Kuroda on Friday will also be closely watched.
Ahead of the coming week, Investing.com has compiled a list of these and other significant events likely to affect the markets.
Monday, June 16
The U.S. is to produce data on industrial production and manufacturing activity in the Empire State.
Tuesday, June 17
The U.S. is to produce data on housing starts, building permits and consumer prices.
Wednesday, June 18
The BoJ is to publish the minutes of its latest policy meeting, which contain valuable insights into economic conditions from the bank’s perspective.
Japan is also to release data on the trade balance, the difference in value between imports and exports.
Later Wednesday, the Federal Reserve is to announce its federal funds rate and publish its rate statement. The announcement is to be followed by a press conference with Fed Chair Janet Yellen.
Thursday, June 19
The U.S. is to publish the weekly report on initial jobless claims as well as a report on manufacturing activity in the Philadelphia region.
Friday, June 20
BoJ Governor Haruhiko Kuroda is to speak at an event in Tokyo; his comments will be closely watched.