By Michael Kitchen , MarketWatch
LOS ANGELES (MarketWatch) — The Japanese yen reversed course to weaken against the dollar during Asian morning trade Friday, even as the dollar itself fell against many of its rivals.
After ending Thursday trade in North America at ¥84.89, the dollar (USDYEN 85.1400, +0.1300, +0.1529%) rebounded to ¥85.25 by midday Friday.
Overall, however, the dollar was lower, with the dollar index (DXY 75.25, -0.33, -0.44%) , a measure of the U.S. unit against a basket of six major currencies, slipped to 75.395 from 75.553 late Thursday.
The move came amid a possible shutdown of the U.S. federal government as Democrats and Republicans had yet to make a deal ahead of a Friday night budget-funding deadline. See report on latest developments in U.S. budget showdown.
It also followed an expected European Central Bank quarter-point interest-rate hike, the first tightening by the ECB since the start of the global financial crisis in 2008.
The rate hike supported the euro (EURUSD 1.4387, +0.0089, +0.6224%) , which extended its rise Friday, hitting $1.4361 from $1.4311 late Thursday. With the European currency gaining and the Japanese unit falling, the euro-yen cross-rate (EURYEN 122.5100, +0.9300, +0.7648%) rose by almost a full yen, hitting ¥122.38 versus ¥121.46 late Thursday.
While the Bank of England held rates steady, the pound (GBPUSD 1.6380, +0.0065, +0.3983%) nonetheless strengthened, rising to $1.6352 from $1.6325 late Thursday in North America.
