Summary The dollar firmed against the yen in Asia Friday, shrugging off weak US growth figures.
TOKYO (AFP) - The dollar firmed against the yen in Asia Friday, shrugging off weak US growth figures as a rebound in Tokyo stocks boosted risk sentiment and pulled investors away from the safe-haven yen.
The greenback fetched 101.05 yen in Tokyo morning trade from 100.74 yen in New York late Thursday, while the euro also strengthened to 131.79 yen from 131.39 yen. The European single currency was flat at $1.3042.
"Previously the yen s weakening raised expectations for an improvement in corporate profits and pushed Japanese stocks higher, but these days gains in stocks are leading to a weaker yen," a senior dealer at a major Japanese trust bank told Dow Jones Newswires.
Yen trading and Japanese stocks are closely interlinked as the value of the unit affects the competitiveness of the country s exporters overseas.
Tokyo s benchmark Nikkei 225 index was up about two percent Friday morning on the back of buying on dips after tumbling more than five percent the previous day to a five-week low.
Earlier Friday, a batch of official data showed Japanese factories churned out a better-than-expected performance in April, but the industrial data rise was tempered by other figures showing that the export powerhouse remained mired in deflation.
On Wednesday, the Organisation for Economic Cooperation and Development slashed its growth forecast for the world s most advanced economies, except Japan, in an apparent nod to the country s prospects.
The International Monetary Fund is to release its figures for Japanese growth later Friday.
On Thursday, the dollar had weakened against major currencies after slightly weaker US economic data put a damper on demand for the greenback.
First-quarter economic growth was revised slightly lower, to 2.4 percent, and pending home sales in April were well below expectations, weak figures that were "seen to support the (Federal Reserve) maintaining its aggressive stimulus measures" which tend to weigh on the dollar, National Australia Bank said.
"Looking ahead, next week s payrolls data, ISM manufacturing and key Fed speeches will be crucial to shaping expectations about the timing for tapering (monetary easing)," it added.
The euro, meanwhile, drew support from an encouraging eurozone indicator showing economic sentiment rose in May and as investors adjusted portfolios before the month end.
Markets will keeping an eye on eurozone inflation and jobless rates later in the day, dealers said.
