US dollar higher versus yen on Japanese tertiary industry data

USD/JPY rose on Monday following the release of Tertiary Industry Activity Index in Japan. The pair hit 94.97 during early European session, currently the session high, after which consolidated at 94.84. Last week USD/JPY registered a 3.8% weekly decrease, the largest decline since July 2009. Support was expected at April 4th low, 92.72, while resistance was to be met at last Thursdays high, 96.09.

Japanese yen advanced significantly against the US dollar and the euro during last week, due to sharp declines of Japanese shares and sustained volatility in the domestic bond market. Bank of Japan disappointed investors expectations by not taking correspondent measures to ease these conditions. This and the continuing expectation of FED reducing the scale of asset purchases on a monthly basis triggered a huge sell-off of risk assets and safe haven demand for national currency.

Additionally, on Friday last week University of Michigans preliminary reading for the consumer sentiment index in June dropped to 82.7 from 84.5 in May. Estimates showed that in June this indicator would remain at the level of 84.5. It caused the USD/JPY pair to erase almost 1.25%.

Earlier today, official data showed that Tertiary Industry Activity Index in Japan remained unchanged in April on a monthly basis, defying estimates of a slight 0.2% increase, while revised data during the previous month pointed a decrease by 0.2%.