The dollar pushed higher against the yen on Tuesday, recovering from the two week low struck on Monday after data showed that activity in the U.S. services sector slowed unexpectedly in December.
USD/JPY rose to session highs of 104.62, and was last up 0.21% to 104.44.
The pair was likely to find support at 103.90, Monday’s low and the lowest since December 23, and resistance at 104.94, Monday’s high.
The dollar slid after the Institute of Supply Management said Monday that its non-manufacturing purchasing manager''s index declined to 53.0 in December from 53.9 in November. Analysts had expected the index to increase to 54.5.
The ISM said the new orders index contracted for the first time since July 2009, falling to 49.4.
Investors were turning their attention to Wednesday’s minutes of the Federal Reserve’s December meeting and Friday’s U.S. jobs report for December for further indications on the possible timing of reductions in Fed stimulus.
The dollar was fractionally higher against the euro, with EUR/USD dipping 0.06% to 1.3619.
In the euro zone, data released on Tuesday showed that German retail sales rose 1.5% in November, more than double expectations for an increase of 0.6%.
Elsewhere, the euro was higher against the yen, with EUR/JPY rising 0.17% to 104.46.