Investing.com - The yen rose against the dollar on Monday after data showing that Japan posted a much larger-than-forecast trade surplus in April as exports fell at the fastest rate in three months.
USD/JPY was down 0.4% at 109.67, backing off the three-week highs of 110.58 set on Friday.
Data on Monday showed that Japan’s trade surplus for April came in at ¥823.5 billion, far above forecasts for ¥493 billion.
Exports declined 10.1% on a year-over-year basis, while imports fell 23.3%, pointing to weakening domestic demand.
A separate report showed that Japanese factory activity contracted at the fastest pace in over three years in May as new orders fell.
The downbeat data added to pressure on the Bank of Japan to step up measures to spur growth.
The reports came after a meeting of the G7 ended on Saturday with the U.S. reiterating warnings to Tokyo against intervening to weaken the yen.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, eased to 95.13, still not far from Thursday’s two-month highs of 95.51.
Demand for the dollar continued to be underpinned after last week’s Federal Reserve April meeting minutes revived expectations for higher interest rates.
Officials said a June rate hike would be appropriate if economic data indicated that growth was picking up in the second quarter and employment and inflation were firming.
The U.S. central bank hiked rates in December for the first time in almost a decade.
The euro was little changed, with EUR/USD at 1.1231, holding above Thursday’s two-month lows of 1.1179.
In the euro zone, data on Monday showed that French private sector activity grew at the fastest pace in seven months in May, easing concerns over the economic outlook of the euro zone’s second largest economy.