RTRS:Dollar near three-week low versus yen on U.S., Japan data
(Reuters) - The dollar hovered near a three-week low against the yen on Friday after improved Japanese data, along with Thursday's softer U.S. economic numbers, dampened the prospect of the Federal Reserve reducing it's monetary stimulus efforts.
The dollar was down 0.2 percent at 100.54 yen, close to a three-week low of 100.46 yen hit on Thursday. But traders said it could be influenced by month-end flows and a reported large options expiry at 100.80 yen later on Friday.
Investors have been taking profit on the dollar's recent rise to a three-year high against a basket of currencies. But analysts said the dollar could pick up again if closely-watched U.S. data next week, including manufacturing activity and monthly jobs figures, are stronger.
The yen benefited after data showed a pick-up in Japan's factory output and ebbing deflation, which analysts said sparked talk monetary easing in Japan may not need to be as aggressive as previously thought.
"I'm generally in favor of a correction in dollar/yen and the 97/97.50 level will be an area of focus if the 100 level breaks," said John Hardy, currency analyst at Saxo.
Earlier this month, the dollar rallied to a 4-1/2 year peak of 103.74 yen.
The euro was down slightly against the dollar at $1.3033, but it stayed above the psychological $1.30 level and near a three-week high of $1.3062 set on Thursday.
The dollar fell after U.S. data on Thursday showed weekly initial jobless claims unexpectedly rose last week while the U.S. economy grew at a slightly slower pace in the first quarter than initially estimated.
"The market had gone a bit too far in expecting the Fed to taper its bond buying. The dollar may be consolidating for now," said Ayako Sera, senior market economist at Sumitomo Trust Bank in Tokyo.
The dollar index, which measures its value against a basket of six major currencies, stood at 83.085, close to Thursday's two-week low of 82.955 .DXY. But it was still poised to end up around 1.6 percent on the month, having rallied to a three-year peak of 84.498 on May 23.
