TOKYO (AFP) - The dollar edged upward in Asian trade Friday as players bet on an improvement in employment in the United States despite a weak report on first quarter economic growth there, dealers said.
The dollar inched up to 121.75 yen in Tokyo morning trade from 121.71 yen late Thursday in New York.
The euro fell to 1.3452 dollars from 1.3477 dollars but gained slightly to 163.79 yen after 163.76 yen.
Views on the US economy were mixed after a downgrade to US first quarter growth but optimism appeared to be slightly outweighing pessimism, said Hironobu Hagi, a deputy general manager at Shinsei Bank.
"The consensus is that the US economy is weak enough to create high levels of uncertainties over its future," Hagi said.
US gross domestic product (GDP) growth was revised Thursday to a 0.6 percent annualised pace, the slowest for more than four years and down from last month's initial estimate of 1.3 percent.
But the dollar drew support from the Chicago purchasing managers index of factory activity in the Midwest which jumped to 61.7 points, pointing to a strengthening of economic activity.
"There is some momentum in the market to test the 122 yen level but most players are taking a wait-and-see stance ahead of the US payroll figures," Hagi said.
Market forecasts are for US jobs growth of 135,000 in May, up from 88,000 in April. The payrolls are a key event for the market, which is anxious for fresh clues on the outlook for US interest rates.
The Federal Reserve has been on hold for nearly a year with base US rates at 5.25 percent. In recent months, market participants have shifted away from a perception that the Fed will need to cut rates to stimulate flagging growth.
Dealers also said political concerns following the suicide of Japan's scandal-hit farm minister were weighing on the yen.
Prime Minister Shinzo Abe was expected Friday to name a replacement for minister Toshikatsu Matsuoka, who committed suicide earlier this week amid allegations of corruption, reports said.