Investing.com - The dollar gained against the yen on Thursday after U.S. economic growth rates came in strong, while recovery in global stock markets enticed investors out of safe-haven yen positions.
In U.S. trading, USD/JPY was up 0.42% and trading at 102.70, up from a session low of 102.08 and off a high of 102.89.
The pair was expected to test support at 101.84, Wednesday''s low, and resistance at 103.44, Tuesday''s high.
The dollar rallied after the Commerce Department said gross domestic product expanded 3.2% in the three months to December, in line with most forecasts, even outpacing some, following a 4.1% rise in the third quarter.
Consumer spending rose by 3.3%, the strongest since the fourth quarter of 2010, while exports grew by 11.4%.
The data strengthened the dollar by cementing market expectations for the Federal Reserve to continue trimming its monthly bond-buying program, which weakens the greenback pushing down long-term interest rates.
On Wednesday, the Fed said it was cutting the program to USD65 billion from USD75 billion. The program launched in late 2012 at USD85 billion in monthly purchases of Treasury and mortgage debt.
Elsewhere on Thursday, the Labor Department said the number of individuals filing for unemployment assistance in the U.S. last week rose by 19,000 to 348,000 from the previous week’s revised total of 329,000.
Analysts were expecting the figure to remain relatively unchanged at 330,000, though investors shrugged off the data.
Separately, the National Association of Realtors said its pending home sales index dropped by a seasonally adjusted 8.7% last month, disappointing expectations for a 0.3% gain, which also failed to dampen spirits.
Rough winter weather has taken its toll on recent economic indicators, though general market attitudes persist that U.S. recovery remains on track.
Rising stock prices in the U.S., Europe and elsewhere also bolstered the dollar.
The yen has served as the safe-haven asset class of choice during recent turbulence in emerging markets, though relief buying in equities markets prompted investors to sell the yen for profits.
The yen, meanwhile, was up against the euro and up against the pound, with EUR/JPY down 0.44% at 139.12, and GBP/JPY trading down 0.17% at 169.18.
On Friday, the U.S. is to round up the week with a report on manufacturing activity in the Chicago region, revised data on consumer sentiment and a report on personal spending.