Investing.com - The U.S. dollar pared back losses against the yen on Wednesday after a report from the Institute of Supply Management showed that the U.S. service sector expanded more quickly than forecast in January.
USD/JPY was down 0.27% to 101.6 after falling lows of 100.80 earlier in the session.
The pair was likely to find support at 100.74, Tuesday’s low and an 11-week low and resistance at 101.75, the session high.
The dollar found support after the ISM’s services purchasing managers’ index came in at 54.0 in January, up from 53.0 in December. Analysts had expected the index to rise to 53.7.
Earlier Wednesday, a report showed that the Markit U.S. services PMI rose to 56.7 last month from 55.7 in December, slightly higher than expectations for a reading of 56.6.
The data eased concerns over a possible slowdown in the U.S. recovery after Monday’s ISM manufacturing index showed that activity slumped to a seven-month low in January.
Demand for the safe haven yen continued to be underpinned as investors remained cautious ahead of Friday’s closely watched U.S. nonfarm payrolls report for January, after data released on Wednesday showed that the U.S. private sector added fewer-than-expected jobs in January.
ADP non-farm payrolls rose by 175,000 last month, below expectations for an increase of 180,000.
Friday’s report is expected to show that jobs growth rebounded in January after unseasonably cold weather in December kept gains down to 74,000.
The euro was also lower against the yen, with EUR/JPY down 0.27% to 137.03, not far from Monday’s 11-week lows of 136.21.
Elsewhere, the euro edged higher against the dollar, with EUR/USD rising 0.19% to 1.3543.
The euro remained supported after encouraging euro zone private sector data for January offset a report showing a sharp fall in retail sales in the region in December.
The final reading of the euro zone composite output index came in at a two-and-a-half year high of 52.9 in January, up from 52.1 in December. A separate report showed that euro zone retail sales fell at the fastest rate since May 2011 in December.
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