The dollar extended gains against the yen after data released by the Institute for Supply Management in the United States, which showed the country’s services sector expanded slightly more than expected in May.
The ISM non-manufacturing (services) index came in at 53.7 for May from April’s 53.5. A reading above 50 signals expansion. Expectations were for a reading of 53.5.
The result was due to a significant rise in new orders which helped offset a fall in the employment index to near-flat. New orders bounced off last month’s low, up 2.0 points to 55.5, while not fully recovering from the 5.3-point April decline. The employment index dropped 2.4 to 50.8, indicating virtually no growth, and marking the weakest reading of the year.
Though the ISM numbers have less of an impact than usual, , the rebounds from April lows in activity and new orders are hopeful signs for the near future.
The dollar rose to 78.78 yen immediately after the data, up 0.5 percent, from 78.66 yen just before the report.