Forex - Yen dips in Asian trade with Japan trade thin ahead of holiday

Investing.com - The Japanese yen weakened in early Asia on Friday with a light trading day expected ahead of a three-day weekend.

There are no major data releases in Asia on Friday and markets are closed on Monday in Japan for a public holiday.

USD/JPY traded at 118.26, up 0.07%, while AUD/USD changed hands at 0.8618, down 0.02%.

Overnight, the dollar traded mixed to higher against most major currencies on Thursday after a robust Philadelphia-area factory gauge sparked demand for the greenback on sentiments that the U.S. economy may be gaining steam.

The Federal Reserve Bank of Philadelphia reported earlier that its manufacturing index improved to 40.8 this month from 20.7 in October.

Analysts had expected the index to decline to 18.5 in September, and the surprise jumped strengthened the U.S. currency against its European counterpart.

On the index, a reading above 0.0 indicates improving conditions, below indicates worsening conditions.

The current new orders index, which reflects the demand for manufactured goods, increased 18 points, to 35.7.

The current employment index rose 10 points in November, to 22.4, and hit a 3½ year high.

Upbeat U.S. inflation data also boosted the dollar by firming expectations that the Fed remains on track to raise interest rates next year.

The Labor Department reported earlier that the U.S. consumer price index was unchanged in October, beating expectations for a 0.1% dip.

On a year-over-year basis consumer prices rose 1.7% last month, unchanged from September, and stronger than market calls for a 1.6% jump.

Core inflation, which strips out volatile food and energy components, rose by 0.2% during the month, pushing the annual rate up to 1.8%, both figures in line with market forecasts, which fueled dollar demand.

Also from the Labor Department, data released earlier revealed that the number of Americans filing new claims for unemployment benefit fell by 2,000 last week, to 291,000. Economists had expected a fall to 286,000, thought it was still the tenth straight week that initial claims remained below 300,000.

The number of continuing claims also fell, to 2.33 million, the lowest level since December 2000.

The US dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, was up 0.03% at 87.74.