TOKYO: 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 Japanese currency.
The greenback fetched 101.01 yen in Tokyo afternoon trade from 100.74 yen in New York late Thursday, while the euro also strengthened to 131.65 yen from 131.39 yen. The European single currency slipped to $1.3033 from $1.3043.
"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 rose 1.37 percent Friday as investors scooped up bargains after the market tumbled more than five percent the previous day to a five-week low.
In its annual country report, the International Monetary Fund (IMF) on Friday gave a cautious thumbs up to Japan's economy-boosting efforts which call for huge government spending and central bank monetary easing.
"The rewards are potentially large" although there are "considerable downside risks" if Tokyo doesn't chop its huge national debt, the Washington-based fund said.
Yen weakness also won support from the IMF, which brushed off concerns about the currency's rapid devaluation.
On Thursday, the dollar had weakened against major currencies after slightly weaker US economic data put a dampener on demand for the greenback.
The figures are "seen to support the (Federal Reserve) maintaining its aggressive stimulus measures", which tend to weigh on the dollar, National Australia Bank said.
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 be keeping an eye on eurozone inflation and jobless rates later in the day, dealers said.
The dollar was mixed against other Asia-Pacific currencies.
It slipped to Sg$1.2617 from Sg$1.2642 the previous day, to 9,803 Indonesian rupiah from 9,880 rupiah, to 42.26 Philippine pesos from 42.27 pesos, and to Tw$29.95 from Tw$29.98.
The greenback strengthened to 1,128.90 South Korean won from 1,127.28 won and to 56.50 Indian rupees from 56.15 rupees. It was flat at 30.18 Thai baht.
The Australian dollar fell to 96.37 US cents from 96.77 cents while the Chinese yuan fetched 16.43 yen from 16.44 yen.
