US dollar fell to lower levels against the Japanese yen on Monday from near five-week highs, because of the decline in Asian shares overnight, that increased demand for the yen.
USD/JPY slid to a session low at 100.94 at 6:07 GMT, after which consolidated at 101.10. Support was expected at July 5th low, 99.88, while resistance was to be encountered at May 29th highest point, 102.51.
The yen came off near five-week lows against the greenback as fears of a tighter credit policy in China appeared, which caused domestic shares to plunge.
On the other hand, support for the greenback was still strong, following the report by the Department of Labor in the United States, which stated economy added 195 000 job positions in June, more than the expected increase by 165 000. At the same time, Unemployment rate remained unchanged at 7.6% in the month of June in comparison with May. These figures gave strength to expectations of a near-term asset purchase tapering by the Federal Reserve Bank.
Meanwhile, earlier on Monday a report said that Japanese current account surplus increased to a smaller than projected amount of 0.541 trillion JPY in May, while the expected figure was 0.600 trillion JPY. Mays result showed a slow down in comparison with the previous month, when the recorded surplus amounted to 0.750 trillion JPY. However, current account of Japan managed to register a surplus for the second month in a row in May, submitting a signal that economy may be recovering. Japans Trade Balance, at the same time, recorded a slightly wider than expected deficit in May, 0.907 trillion JPY versus 0.902 trillion JPY, according to initial estimates. In the previous month trade balance deficit was smaller, 0.819 trillion JPY.
Elsewhere, the yen advanced against the euro as well, with EUR/JPY cross ticking down by 0.02% to 129.85.
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