Yen trading lower after poor Japanese economic data

For the 24 hours prior to 23:00 GMT on Friday, the US dollar weakened 0.35 per cent versus the Japanese yen, closing at 79.63.

The leading index went up in Japan to a 95.9 reading in May, up from a revised 95.6 reading the previous month, while the coincident index fell marginally to 95.8 in May.

The Asian session saw the pair trading at 79.67, with the greenback trading 0.05 per cent higher than close of trade on Friday. The yen faced pressure after Japan released some weak economic data.

In Japan on Monday, it was revealed that current-account surplus in May fell to 215.1bn yen ($2.7bn), showing a 62.6 per cent contraction from the same period last year. In addition, the nation’s trade account delivered a larger deficit of 848.2bn yen, following market forecasts of a deficit of 836.8bn yen. Separately, month-on-month machine orders dropped dramatically by 14.8 per cent in May, in comparison with a market expectation of a contraction of 2.6 per cent.

The pair is predicted to see support at 79.41, and a drop through could see it edge towards the next support level at 79.15. Expectations are that the pair will first come across resistance at 79.95, while a rise through may see it climb closer to 80.23, the next resistance level.