/www.fxserver.com/ TOKYO, Sept 13 - The dollar slipped below 120 yen in Asia on Friday, pressured by weak U.S. economic data and a decline on Wall Street, but its falls were limited with no convincing fundamental factors to buy the yen or euro strongly.
The greenback edged down as Tokyo operators were closing long positions ahead of a three-day weekend in Japan, with dollar bears continuing to worry about possible U.S. military action in Iraq.
The dollar also came under slight pressure on media reports that the U.S. National Association of Manufacturers had voiced concerns that three-quarters of the U.S. current account deficit was caused by an over-valued dollar, dealers said.
But the greenback was supported by firm option-linked bids lined up around 119.70 yen, they said.
"Despite a series of weak factors for the dollar, including falls in U.S. stocks, it was well-supported," said Hideaki Furumaya, head of the interbank desk at Trust and Custody Services Bank.
Dealers said selling by Japanese exporters weighed on the dollar, but overseas operators were willing to create new long positions after it broke through several key technical resistance levels in the past two weeks.
The dollar may test key levels above 120.70 yen and closely watched 121.37 yen -- a recent high hit on August 9 -- while Tokyo operators are on holiday.
Tokyo financial markets will be closed on Monday for Respect the Aged day.
At 0255 GMT, the dollar was at 119.74/79 yen against Thursday's late U.S. level of 120.10/18 yen.
The euro was little changed at $0.9819/22 compared with $0.9822/27 in late U.S. trade.
WEAK U.S. DATA
The dollar edged down from highs in offshore trade after a series of economic data was released, with the number of U.S. jobless rising to a four-month high of 426,000 for the week ending September 7 from 407,000 the week before.
The U.S. second-quarter current account deficit mushroomed 15.6 percent to a record $129.96 billion.
The Dow Jones industrial average shed 2.35 percent to close at 8,379.41, while the technology-laden Nasdaq index gave up 2.72 percent to 1,279.
Traders said that Congressional testimony by Federal Reserve Chairman Alan Greenspan did not ease worries about the prospects of the U.S. economy and failed to draw fresh dollar purchases.
Greenspan said the United States had weathered the impact of falling stock markets, lower investment and the September 11 attacks, but some depressing effects linger.
The closely watched address to the United Nations by U.S. President George W. Bush on Thursday also did not have a direct impact on the dollar.
Bush said that if the U.N. did not swiftly move to disarm Iraq, then "action will be unavoidable".
Traders said Bush's speech was taken as a sign he was willing to work for international action rather than go it alone, easing fears of an immediate U.S. war with Iraq.
MORE DATA
The market was waiting for a batch of fresh U.S. economic indicators scheduled later in the day.
For U.S. retail sales figures for August due at 1230 GMT economists in a survey expect, on average, a 0.5 percent rise compared with a 1.2 percent increase in July.
Traders also focused on the University of Michigan preliminary sentiment index for September due at 1345 GMT, which is expected to show a reading of 87.5 compared with 87.6 in the final August report.
In the cross market, the yen was put under pressure.
"It seems foreign operators are eager to sell the yen reflecting weak fundamentals in Japan and fragile share prices," Trust and Custody's Furumaya said.
The euro was at 117.57/80 yen compared with the late U.S. level of 117.77/89 yen.
Copyright 2002, News Service