CURRENCIES: Dollar Up Vs Yen On Upbeat U.S., Weak Japan Data

CURRENCIES: Dollar Up Vs Yen On Upbeat U.S., Weak Japan Data By William L. Watts The dollar fell against most major counterparts Friday, but gained ground versus the yen, as it was helped by better-than-expected U.S. manufacturing data and weak Japanese economic data. The dollar index (DXY), a measure of the greenback against a trade-weighted basket of six major currencies, slipped to 84.54, down from 84.764 in North American trade late Thursday. But the dollar rose to 99.11 yen versus the Japanese currency, up from 98.55 yen. The factory sector contracted again in April, but the pace of decline slowed, according to the Institute for Supply Management index released Friday. Separately, consumer sentiment improved more than expected earlier in April, according to the University of Michigan's latest survey. "Today's U.S. reports provided an array of upside surprises that have reinforced the view that the pace of GDP decline will moderate significantly into [the second quarter], while the [first-quarter] GDP figures now face a likely small upward bump," said Mike Englund, chief economist at Action Economics, in a note. Earlier, Japanese reports had already put the yen under the pressure. "In Asia, the green shoot story has been much talked about of late, but the latest economic data out of Japan captured a severely struggling economy," wrote strategists at Brown Brothers Harriman. "In March, unemployment climbed to the highest in four years, wages fell at the quickest pace in six years, while inflation fell for the first time in 18 months." The Japanese government reported Friday that the country's core consumer-price index fell 0.1% in March, the first year-over-year decline since late 2007, raising concerns of a potential deflationary spiral. The nation's unemployment rate, meanwhile, rose to 4.8%, the highest level in four years. Traders said activity in foreign-exchange markets was subdued due to May Day holidays in Asia and continental Europe. London markets were open Friday but will be closed on Monday. The euro rose to $1.3268 versus the dollar in quiet trade, up from $1.3224 late Thursday. The British pound rose 1% to $1.4917 from $1.4783. Sterling extended gains after the purchasing-managers index for the U.K. manufacturing sector indicated that activity at factories continued to shrink in April, but at a slower-than-expected pace. The purchasing-managers index produced by Markit Economics and the Chartered Institute of Purchasing and Supply rose to 42.9 in April from an upwardly revised 39.5 in March, continuing a recovery from a record low of 34.9 in February. The reading remains well below the neutral 50 mark, however. A reading of less than 50 indicates a majority of purchasing managers saw declining activity. A figure of more than 50 signals expansion. Click here to go to Dow Jones NewsPlus, a web front page of today's most important business and market news, analysis and commentary: http://www.djnewsplus.com/access/al?rnd=rX4niQXJjYgIJl3Wiwfg5g%3D%3D. You can use this link on the day this article is published and the following day.