US dollar advanced against the Japanese yen, but gains seemed limited

On Thursday US dollar pushed higher against the Japanese yen due to continuing weakness of Japanese stocks and diminished risk appetite of investors urged them to seek safe haven in national currency.

USD/JPY pair crumbled to 98.85 during the late phase of Asian trade, session low for the moment, after which the cross consolidated at levels above 99.00. Support was expected at May 9th low, 98.63, while resistance was to be met at Wednesdays high, 100.45.

Japans major index Nikkei 225 recorded a considerable drop in the course of a volatile trade session today, which was boosted by Prime Minister Shinzo Abes speech on stimulating economic growth strategies, which did not match market expectations.

Meanwhile, US dollar remained under pressure after official ADP Employment report showed on Wednesday that US economy added fewer than expected jobs during May, 135 000, in comparison with the projected 165 000.  This report is often used as a clear signal for non-farm payrolls indicator, which is expected on Friday.

Additionally, on Wednesday the Beige Book report announced that US economy managed to expand at a modest to moderate rate in 11 out of 12 federal districts in the country. Growth was registered in almost all sectors of the economy – from services to construction and industry. According to the report, hiring was gradually increased in most regions, but difficulties were present in finding qualified workers in several of the districts. Growth in Dallas was defined as strong. FED policymakers are to take this report into account at the central banks meeting, scheduled on June 18-19, where decision may be made whether employment level is sufficient in order to begin a possible scale back of the stimulus program.