TOKYO: The euro dug in against the dollar and yen on Friday after bouncing back from multi-month lows in the previous session in response to upbeat manufacturing data.
The news out of Europe added an upbeat outlook fuelled by a surge in an index that gauges the manufacturing sector in China, the world's number two economy.
The single currency bought $1.3465 and 137.06 yen in Tokyo, compared with $1.3464 and 137.07 yen in New York late Thursday.
It had sunk to an eight-month low of $1.3445 and a five-month low of 136.45 yen in Asia earlier Thursday on concerns about the effect of sanctions on Russia -- a key eurozone energy supplier -- over its links to Ukrainian rebels accused of shooting down MH17 last week.
However, it rallied after private research firm Markit said its purchasing managers index (PMI) jumped in July to 54 from 52.8 in June. A figure above 50 points to growth in the sector while anything below suggests contraction. But Markit did warn that the crisis in Ukraine was still clouding the outlook.
The dollar fetched 101.79 yen, against 101.81 yen in New York. The greenback had rallied in US trade from 101.47 yen earlier in the day in Tokyo as investors welcomed a China PMI from banking giant HSBC that came in at 52.0 for July from a final reading of 50.7 in June.
The US currency's advance was staunched later, though, when figures pointing to a drop in new home sales offset news that US unemployment insurance benefits had hit an eight-year low last week.
It was "another disappointing housing release that will again highlight housing concerns for the Federal Reserve ahead of next week's...(policy) meeting", said National Australia Bank.
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