TOKYO: Yen trading was volatile in Asia on Friday in tandem with wild swings on the Tokyo stock market, but some analysts said the Japanese currency's weakening trend was likely to continue.
In afternoon deals, the dollar weakened to 101.73 yen, compared to 101.82 in New York late Thursday, after jumping over the 102.50-yen level in morning trade.
Euro-yen trading also zigzagged, buying 131.54 yen in the afternoon from 131.72 yen in New York and over the 132-yen mark in Friday morning deals. The euro was almost flat at $1.2934.
Also Friday, the benchmark Nikkei 225 stock index soared in the morning and then briefly plunged in the afternoon before closing up 0.89 percent to 14,612.45.
The Nikkei and yen trading are closely linked with a weaker currency tending to boost the market as it makes exporters' more competitive overseas and boosts their repatriated foreign income.
"The yen's broader weakening trend will likely continue," said Akira Moroga, manager of the foreign exchange products group at Aozora Bank.
"Still, the yen may not weaken as fast as it has previously because stocks may lose their upward momentum."
On Thursday, the Nikkei plunged over seven percent on weak China data, its biggest one-day drop since Japan's March 2011 quake-tsunami disaster.
"Participants are still very nervous from Thursday's plunge in share prices, and movements in the forex market are closely linked to movements in the Nikkei," Kengo Suzuki, forex strategist at Mizuho Securities, told Dow Jones Newswires.
Credit Suisse said yen weakness may not last.
"It is difficult to justify the (current) 102-103 yen range to the dollar," Credit Suisse research analyst Hiromichi Shirakawa said in a note, arguing the dollar's fair value would be around 85 yen.
The dollar rose past 103 yen this month to hit its highest level since October 2008 on the Bank of Japan's aggressive monetary easing and robust US economic data.
Dollar trade Friday also moved on differing interpretations over comments from US Federal Reserve chairman Ben Bernanke, although dealers generally saw him as saying the Fed needed to see a few months' more of data before it would weigh reining in its bond-purchase programme.
The dollar eased against other Asia-Pacific currencies.
It slipped to Sg$1.2647 from Sg$1.2684 the previous day, to 9,800 Indonesian rupiah from 9,820 rupiah, and to 1,126.90 South Korean won from 1,127.70 won.
The dollar also eased to 29.94 Thai baht from 30.06 baht, to Tw$29.87 from Tw$30.01, to 41.60 Philippine pesos from 41.80 pesos and to 55.55 Indian rupees from 55.90 rupees.
The Australian dollar firmed to 96.68 US cents from 96.38 cents while the Chinese yuan changed hands at 16.58 yen against 16.63 yen.
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