Investing.com - The dollar touched session highs against the yen on Tuesday as a selloff in emerging markets paused, but investors remained cautious amid concerns over signs of a slowdown in the U.S. economic recovery.
USD/JPY was up 0.53% to 101.51, recovering from two-month lows of 100.76 reached earlier in the trading day.
The pair was likely to find support at 100.76 and resistance at 101.90.
Investors remained wary after weak U.S. factory data on Monday reinforced negative investor sentiment in the wake of a broad based selloff in emerging markets.
A report by the Institute of Supply Management showed that its manufacturing index fell to a seven-month low in January, as new orders slumped.
The data sparked concerns over the outlook for the economic recovery, ahead of Friday’s U.S. jobs report for January, after December’s report showed that the economy added far fewer jobs than expected.
Data released on Tuesday showed that U.S. factory orders fell 1.5% in January, compared to expectations for a decline of 1.7%.
The euro was also higher against the safe haven yen, with EUR/JPY up 0.37% to 137.07, recovering from two-and-a-half month lows of 136.24.
Elsewhere, the euro was lower against the dollar, with EUR/USD sliding 0.18% to 1.3506.
The euro remained under pressure after data late last week showed that the annual rate of euro area inflation slowed to 0.7% in January from 0.8% in December.
The weak data sparked concerns that the European Central Bank may tighten policy in order to stave off the risk of deflation in the region, ahead of its upcoming policy meeting on Thursday.
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