TOKYO: Tokyo shares fell sharply on Friday on the back of a stronger yen and the dollar languished at a five-week low against a basket of currencies as investors waited for clarity on US stimulus at the Federal Reserve's policy meeting next week.
A Wall Street Journal report that the Fed may debate changing its forward guidance to help ram home its message that it will keep interest rates low for a long time to come put the dollar on the back foot overnight.
But most economists and traders still expect the Fed could start tapering its monetary stimulus in September.
The dollar eased 0.4 percent against a basket of major currencies to be not far from a five-week low touched on Thursday, offering some support to gold and crude prices.
Against the yen, it was down 0.5 percent at a two-week low of 98.750 yen. The euro was steady at $1.32845, after gaining 0.6 percent overnight on the back of positive economic reports from the euro zone.
A gauge of planned US business spending on capital goods rose in June, while new claims for jobless benefits edged higher last week but remained within a range that suggests the labour market's recovery is on track.
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