LONDON (AFX) - The dollar was up against major currencies in a quiet early London session, boosted by a weaker Japanese Tankan report, dealers said.
The diffusion index of business sentiment at large Japanese manufacturers fell to minus 16 in June, the Bank of Japan said in its latest quarterly survey of short-term business conditions, known as the Tankan.
In March, the large manufacturers diffusion index had stood at minus 5 and was forecast to deteriorate to minus 8 in June. Paul Bednarczyk, analyst at 4Cast said that it had been a quiet start to the week, with little in the way of activity following some pre-Tankan release dollar/yen profit-taking.
He said: "We've seen a run up in dollar/yen to 125, which has been a target for a long time and it was perhaps not a surprise to see some profit-taking, with Japanese exporters selling as well. But there is no huge volume going through"
Euro/dollar was down after the French and Italian manufacturing sector purchasing managers' index came in mixed.
"The euro is a little but heavy but there is no special sellers here," Bednarczyk said.
The French manufacturing sector purchasing managers' index rose to a seasonally adjusted 48.8 in June from a revised 48.5 in May, while the Italian fell to 48.3 in June from 48.4 in May.
A reading above 50 indicates that the manufacturing sector is generally expanding, while a reading below 50 suggests that it is generally contracting.
He said opinion remained divided as to whether or not the European Central Bank would act on its monetary policy this week.
"We have the 4 July holiday in the middle of it all, things could go quite quiet really concerning the decision," he added.
Sterling was also down against most currencies ahead of a string of economic data, including June manufacturing PMI, due at 9.30.
"Sterling is quite strong overall. A lot of the technical comments we heard suggest that perhaps we've seen the base in sterling/dollar," he said.