Investing.com - The dollar rose against the yen on Thursday even after a gauge of Philadelphia area factory activity came in far below expectations, which investors dismissed as hiccup in U.S. recovery and likely the product of rough winter weather that disrupted commerce.
On Wednesday the Federal Reserve suggested in the minutes of its January policy meeting that it will continue dismantling stimulus programs that soften the greenback to kick-start recovery.
Asset purchases aim to bolster the economy by suppressing long-term interest rates, a strategy that sends investors to stocks to spur investing and hiring, thus weakening the dollar as a side effect.
In U.S. trading, USD/JPY was up 0.03% and trading at 102.34, up from a session low of 101.67 and off a high of 102.42.
The pair was expected to test support at 101.39, Monday''s low, and resistance at 102.75, Tuesday''s high.
The Federal Reserve Bank of Philadelphia said that its manufacturing index plunged to minus 6.3 in February from January’s 9.4 reading. Analysts had expected the index to inch down to 8.0 in February.
Still, the report did little to convince investors that the Federal Reserve will rethink its policy of gradually dismantling its bond-purchasing program, which currently stands at $65 billion in Treasury holdings and mortgage debt purchased by the U.S. central bank from banks each month
Also on Thursday, the Department of Labor said the number of individuals filing for unemployment assistance in the U.S. last week fell by 3,000 to 336,000, slightly below expectations for a decline of 4,000.
In a separate report, the Labor Department said U.S. consumer prices rose 1.6% on a year-over-year basis in January, in line with forecasts. Consumer prices were 0.1% higher from a month earlier, also matching forecasts.
Core consumer prices, which are stripped of volatile food and energy components, were also up 1.6% on a year-over-year basis and 0.1% from the previous month.
The yen, meanwhile, enjoyed safe-haven demand from investors spooked by a soft Chinese manufacturing report.
The preliminary reading of China’s HSBC manufacturing index fell to a seven-month low of 48.3 this month, down from 49.5 in January, falling further below the 50 level that separates expansion from contraction.
The yen, meanwhile, was up against the euro and up against the pound, with EUR/JPY down 0.10% at 140.37, and GBP/JPY trading down 0.11% at 170.46.
On Friday, the U.S. is to round up the week with private-sector data on existing homes sales.
The BoJ is to publish the minutes from its latest monetary policy meeting.