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Dollar subdued in Asia after weak data

Tokyo - The dollar edged up against the yen Asia on Thursday but downbeat US economic news weighed on the unit, while the euro held steady ahead of a European Central Bank (ECB) policy meeting.

In midday Tokyo trade, the dollar bought 99.13 yen, stronger than 99.06 yen in New York on Wednesday but a pullback from morning levels around 99.30 yen.

The euro bought $1.3095 and 129.87 yen, against $1.3091 and 129.65 yen in US trade.

The US unit, which sat around 100 yen in Asia on Wednesday, dived in New York on weak US private-sector payrolls data for May, while the Federal Reserve's Beige Book report on economic conditions showed the economy expanding at a "modest to moderate" speed, suggesting still slow expansion.

Also, the ISM purchasing managers index for the services sector pointed to a hiring standstill despite a pickup in sector growth.

The results add to growing concerns about the US recovery as they await the release of closely watched non-farm payrolls figures on Friday, while dealers await the next move from the Fed amid expectations it will soon start pulling back on its monetary easing.

That put pressure on the dollar as risk aversion in the market stoked buying of the safe-haven yen at the greenback's expense, dealers said.

Disappointment over Japanese Prime Minister Shinzo Abe's latest plan to kickstart the world's third-largest economy also fuelled yen-buying, dealers said.

"The dollar-yen's pull back has continued unabated as disappointment over ... Abe's 'third arrow' speech of structural reforms and a pull back in US Treasury yields, taken together with firming risk aversion, have all contributed to a firmer yen," Credit Agricole said.

Most market watchers expected the ECB to stand pat at its regular monthly meeting later in the day as it examines the effects of a recent cut in interest rates on the eurozone's recession-hit economy.

"While the ECB is unlikely to ease monetary policy further at today's meeting, it should keep a dovish bias and remain 'ready to act' in the future," Credit Agricole said.

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