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 yen level, fetching 94.89 yen in late morning Tokyo trade, weaker than 95.31 yen on Thursday in New York but strengthening from 94.64 yen in Asia on Thursday.
The euro was also weak on the Japanese currency at 126.71 yen from 127.48 yen in US trading, while it slipped on the dollar to $1.3354 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 ramped up speculation about when the Fed will taper off its quantitative easing programme, a massive bond-buying scheme designed to stoke the economy.
"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."
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