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Dollar eases against yen amid US worries

Tokyo - The dollar eased against the yen in Asia on Friday, as weak US economic indicators cast a shadow over the world's biggest economy, dealers said.

The dollar fetched ¥80.67 in Tokyo afternoon trade, down from ¥80.88 late in New York on Thursday. The euro inched down to $1.4464 from $1.4484. The European single currency retreated to ¥116.81 from ¥117.16.

The greenback came under pressure on Thursday as ratings agency Moody's warned US lawmakers they had just weeks to reach a deal to raise the national debt limit, or face a possible ratings review and downgrade.

A string of weak US economic data released this week suggested that a key employment report due out later on Friday may also disappoint.

Official data on Thursday showed new US jobless claims fell slightly last week but still remained high, above 400 000.

Initial claims for unemployment benefits came to a seasonally adjusted 422 000 in the week ending May 28, a decrease of 6 000 from the prior week, the Labour Department said.

"Poor US economic data released earlier this week stoked worries over the course of the US economy," said Gen Kawabe, dealer at Chuo Mitsui Trust and Banking.

Some short-term speculators were joining Japanese exporters' dollar selling as they bet on the payrolls data being much weaker than expected, a senior dealer at a major Japanese bank told Dow Jones Newswires.

Dollar selling by Japanese exporters is increasing as a faster-than-expected recovery of Japan's supply chains prompt the firms to resume making goods as usual, Citibank Japan chief currency strategist Osamu Takashima said.

Supply chains, particularly those in the automobile industry, were disrupted by the massive March 11 earthquake and tsunami.

But auto giant Toyota said on Wednesday its domestic output would return to about 90% of pre-quake levels in June thanks to a faster-than-expected recovery of supplies.

The greenback was widely sold against regional Asian currencies, falling to Sg$1.2323 from Sg$1.2379 on Thursday, to 1 079.30 Korean won from 1 079.95, to 8 539.50 Indonesian rupiah from 8 552.50 and to 43.18 Philippine pesos from 43.21.

The unit held steady at Tw$28.66 while edging up to 30.32 Thai baht from 30.30.

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