Dollar eases from three-week high

It bought ¥81.66 in Tokyo afternoon trade, after topping ¥81.80 earlier in the day. The US unit traded at ¥81.64 in New York late on Wednesday.

The dollar lost ground due to selling by Japanese exporters, a senior dealer at a major Japanese bank told Dow Jones Newswires.

Although selling pressure has waned from the exporters in recent weeks after the massive March earthquake disrupted Japan's production activities, "they still get some dollars to sell from their regular activities," he said.

The euro fetched $1.4265 in the afternoon, up from $1.4236. Against the yen, the euro traded at ¥116.47 compared with ¥116.38 in New York.

The single currency got support from higher oil prices, which buoyed some regional bourses, dealers said.

There was little movement on forex markets to news that IMF head Dominique Strauss-Kahn had resigned as he prepares to defend himself against charges that he sexually assaulted a New York hotel maid.

The yen was little moved after government data showed a much larger than expected decline in Japan's January-March gross domestic product (GDP) due to the impact of the March earthquake, tsunami and a nuclear crisis.

Official data released early Thursday showed Japan's economy plunged back into recession in January-March, contracting by a much worse-than-expected annualised 3.7% in the first three months of the year.

But attention is to be focused more closely on the expected broader impact for the April-June quarter and intervening monthly trade data, said Daisuke Karakama, market economist at Mizuho Corporate Bank.

"If the trade data shows Japan's exports deteriorating, the yen will likely weaken further because of demand-supply issues," he said.

The dollar eased in New York as Europe continued to battle over a Greek debt restructuring and new data showed the US central bank still largely unconcerned about inflationary pressures.

Minutes from the US Federal Reserve's April policy meeting showed very little concern over inflation from most Fed governors and also gave scant evidence for a quick move toward tightening.

The dollar was mixed against other Asian currencies. It slipped to 43.14 Philippine pesos from 43.21, to Sg$1.2385 from Sg$1.2406 and to 8 546.00 Indonesian rupiah from 8 551.00.

The dollar held steady at Tw$28.78, 30.22 Thai baht, and 1 086.20 Korean won.