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Tokyo -The dollar faced selling pressure in Asian currency markets Friday with traders eyeing the safe-haven Japanese yen as questions swirl over the timing of an end to the US Federal Reserve's massive stimulus.
The greenback see-sawed around the ¥95 level for most of the day, fetching ¥95.02 in late afternoon Tokyo trade, modestly weaker than ¥95.31 on Thursday in New York.
The euro was also down against the Japanese currency at ¥126.83 from ¥127.48 in US trading, while it slipped to $1.3344 from $1.3372
Osamu Takashima, a forex strategist at Citigroup Global Markets Japan, said the yen's boost was partly stoked by investors cashing in bets on a fall in the Japanese currency.
"What is happening in the market is clearly an unwinding of Japanese yen-short positions that were being stocked up since September," he told Dow Jones Newswires
During times of turmoil and uncertainty, investors often flock to the yen as a safe-haven currency.
Credit Agricole said recent dollar weakness may have run its course, as positive US economic data ramps up speculation about when the Fed will taper off its quantitative easing programme, a massive bond-buying scheme designed to stoke the economy.
Easing measures tend to weaken a currency.
"Given recent record long US dollar positioning over recent weeks the pull back in the (dollar) versus major currencies may have further to run but we suspect that much of the decline has already taken place," it said.
A reversal in the dollar's downward trend could spell the end for recent euro gains, it added.
"The overall backdrop for the euro is not particularly positive, with growth data remaining weak, albeit less so than in previous months," Credit Agricole said.
"Additionally there are renewed concerns about Greece due to protests over the shutdown of the state broadcaster highlighting the difficulty in implementing crucial deficit-cutting measures."
The dollar was mostly lower against other Asia-Pacific currencies Friday.
It slipped to Sg$1.2523 from Sg$1.2577 the previous day, to 57.84 Indian rupees from 58.51 rupees, to Tw$29.87 from Tw$29.95, and to 1 125.25 South Korean won from 1 135.57 won.
The greenback also weakened to 42.86 Philippine pesos from 43.15 pesos and to 30.57 Thai baht from 30.94 baht. It gained to 9,947 Indonesian rupiah from 9 937 rupiah,
The Australian dollar edged up to 95.83 US cents from 94.50 cents while the Chinese yuan firmed to ¥15.48 from ¥15.36.
