Yen extends gains in Asian trade

TOKYO: The yen strengthened against the dollar and euro in afternoon Asian trade Thursday, extending a rally after the Japanese unit declined sharply for weeks on speculation of more central bank easing.

The dollar slipped to 88.25 yen from 88.37 yen in New York Wednesday afternoon while the euro bought 117.20 yen from 117.42 yen in US trade ahead of a Bank of Japan policy meeting next week.

The 17-nation euro inched down to $1.3281 on Thursday, against $1.3286.

Earlier in the session, the yen slipped against the pair but it then changed course in part driven by the direction of Tokyo's Nikkei 225 stock index.

The bourse slumped 1.28 percent in early afternoon trade after ending the morning session in positive territory.

"Amid strong correlation between the Nikkei Index and the yen, people are buying back the yen as the Nikkei extends its losses," Marito Ueda, senior managing director at FX Prime Corp., told Dow Jones Newswires.

A strong yen generally weighs on Tokyo's equity market as it makes the nation's exporters less competitive overseas while a weakening yen tends to lift manufacturers' shares.

The dollar had almost touched the 90-yen level on Monday, a day before Japan's economy minister Akira Amari warned that the yen's fast decline could hurt consumers by making imports more expensive as the world's third-largest economy struggles to cement a recovery.