The Japanese yen rose against its US rival on Friday to extend its gains for the third day in a row, as strong economic data in the United States failed to support the nation’s currency. The yen is set to end the week at its strongest level since February 9.
Following a day that mostly lacked new economic releases, the greenback fell against the yen despite solid US economic data on Thursday. A report on jobless claims by the US Department of Labor said that applications for unemployment benefits remained near a historically low level at 239,000 in the week ended February 11.
On the manufacturing front, the Philadelphia Federal Reserve said that its manufacturing index rose to 43.3 points, which marked the highest level since 2011. Meanwhile, the Department of Housing and Urban Development said that even though new housing starts declined in January, building permits rose by 4.6% to indicate increased construction in the coming months.
Recent data releases in the United States, which have been mostly positive, prompted Federal Reserve Chair Janet Yellen to hint that the central bank might move to faster pace of increasing interest rates. Yellen said that the economy is growing at a healthy rate, and inflation is ticking closer to the Federal Reserve’s target of 2%, a signal for the Federal Reserve to raise interest rates.
In Japan, investors were relieved after a meeting between US President Donald Trump and Prime Minister Shinzo Abe went smoothly earlier this week, which lifted the yen. Trump, who previously said that Japan manipulates its currency to gain trade advantages, reached an agreement with Abe to conduct bilateral talks between their finance ministers to discuss currency policy.
USD/JPY traded at 112.87 as of 16:55 GMT on Friday, after touching 112.64 at 13:35 GMT, the pair’s lowest level since February 9. USD/JPY started trading today at 113.24.
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