The dollar rose to 88.00 yen from 87.62 yen late Thursday in New York, where the greenback had briefly fallen below 87 yen amid growing concerns over the pace of US economic recovery.

The euro bought 1.2496 dollars, down from 1.2524 dollars in New York late Thursday, while rising to 109.99 yen from 109.70.

The single European currency rose above 1.25 dollars for the first time in more than a month in New York, lifted in part by a successful bond issue by Spain and disappointing US data.

“The dollar may have been oversold” in New York with investors bracing for weak monthly jobs data and trying to factor that in ahead of Independence Day holidays, said Credit Agricole forex director Yuji Saito.

“It triggered short-covering” in Tokyo, he said.

Shinkin Asset Management senior dealer Jun Kato told Dow Jones Newswires that the dollar won support as short-term investors took a cue from a modest rise in Japanese share prices.

The Tokyo Stock Exchange’s benchmark Nikkei index closed 0.13 per cent higher Friday on bargain hunting.

Other dealers in Tokyo said several big Japanese importers were selling the yen to settle their accounts.

A raft of negative US economic indicators released Thursday, including a surge in new claims for unemployment insurance benefits last week and slower growth in manufacturing activity, weighed on sentiment before Friday’s closely watched jobs report.

Job growth is considered a key factor in getting the world’s biggest economy on a sustainable growth track.

The dollar was lower against most major Asian currencies, falling to 1.3947 Singapore dollars from 1.3990 a day earlier, to 46.47 Philippine pesos from 46.61 and to 1,225.00 South Korean won from 1,227.00.

The greenback also slid to 32.20 Taiwan dollars from 32.27 and to 9,051.25 Indonesian rupiah from 9,090, while staying flat at 32.41 Thai baht.
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The greenback traded slightly higher at 89.24 yen in Tokyo morning trade from 89.09 yen in New York late Thursday. The euro edged up to $1.3566 from $1.3546 and to 121.08 yen from 120.71 yen.

The dollar remained under pressure after the US Labor Department said new claims for jobless benefits had jumped to a three-month high, raising doubts about the strength of the economic recovery.

The seasonally adjusted initial claims in the week ending February 20 rose to 496,000, an increase of 22,000 from the previous week’s revised figure of 474,000, the department said.

Dealers also said remarks by Federal Reserve chairman Ben Bernanke are weighing on the dollar after he told a House committee that the US economy still needs low interest rate for some time, disappointing some who had expected a more hawkish stand.

“The market has kind of reverted to the more uncertain outlook it had last October-December on the US economy and the timing of the Fed’s exit strategy,” Yasuo Nakayama, manager at Shinkin Central Bank, told Dow Jones Newswires.

“After Bernanke’s comments this week that tightening is still distant, unless we get more positive data, the downward pressure on dollar-yen should remain dominant,” Nakayama added.

The single European currency firmed against major currencies, but dealers said it remained top heavy amid the debt and public deficit crisis afflicting Greece as well as other sovereign credit concerns in the bloc.
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