The dollar fell Friday against other major currencies, including a more than one cent drop against the euro, after the US January employment report showed a smaller than expected gain in payrolls.
The single European currency spiked up to US$1.2701 in the wake of the figures, from US$1.2545 shortly before their release. The euro had stood at US$1.2547 late on Thursday in New York.
The dollar fell to ¥105.94 from ¥106.70.
US businesses hired 112,000 extra people in January -- a three-year record -- as the jobless rate dipped to 5.6 percent from 5.7 percent in December, the government reported.
But market expectations had been for a rise in non-farm payrolls closer to 200,000.
Traders sold off the dollar on concerns that weak US job growth would keep the Federal Reserve from raising interest rates for the foreseeable future.
Low US interest rates -- the Fed's benchmark lending rate stands at 1.0 percent, half the benchmark rate for the European Central Bank -- have been a key factor behind the dollar's weakness in recent months, analysts say.
The US runs a current account deficit amounting to about 5 percent of GDP, and the federal government has an annual budget deficit of roughly half a trillion dollars.
The need to attract foreign capital to finance these deficits makes low interest rates a handicap for the dollar.
Economists said that the US payroll disappointment made it unlikely that the Fed would want to raise interest rates soon. Many US economists believe the central bank will not tighten policy until payrolls grow by 200,000 or more for several months in succession.
"With this in mind, we suspect that the dollar will continue to slide from here, barring any nasty shocks from the G7 meeting," said Steve Barrow, currency strategist at Bear Stearns.
The meeting of G7 finance ministers and central bank governors getting under way in Boca Raton, Florida was the next focal point for financial markets.
Analysts widely consider it unlikely that the G7 will mount any coordinated effort to halt the dollar's decline in the meeting, which was to end yesterday.
In any case, "there is little, almost nothing, the G7 can do to stop the dollar decline. Amid a huge trade deficit and a ballooning budget deficit they cannot force investors to buy dollar assets," said Paul Podolsky, currency strategist at Fleet Global Markets.
The euro was changing hands at US$1.2701 from US$1.2547 late on Thursday in New York, ¥134.13 (¥132.78), £.6877 (¥0.6837) and 1.5664 Swiss francs (Sf1.5687).
The dollar stood at ¥105.56 (¥105.82) and 1.2329 Swiss francs (Sf1.2500).
The pound was at US$1.8475 (US$1.8334), ¥194.98 (¥193.98) and 2.2773 Swiss francs (Sf2.2919).
On the London Bullion Market, the price of an ounce of gold stood at US$404.25 against US$399.55 late on Thursday.
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