The yen fell against the dollar and euro on speculation record prices for crude oil will restrain the Japanese economy.
The yen is down against 13 of 16 major currencies, including the British pound, Swiss franc and South African rand, after oil for August delivery reached US$60 a barrel for a second day. Japan imports almost all its oil.
"Oil is very much keeping a cap on the yen by limiting upside in stocks," said Naomi Fink, a currency strategist in New York at BNP Paribas. "There is no real reason for the Bank of Japan to be optimistic."
Against the US dollar, the yen fell to £109.04 at 5pm in New York from £108.92 late on Thursday, according to electronic foreign exchange trading system EBS, and finished the week 0.4 percent lower. Japan's currency also weakened to £131.86 per euro from £131.14; for the week it rose about 1.2 percent.
Japanese stocks fell in Tokyo trading. The benchmark NIKKEI 225 index has risen less than 0.5 percent this year, the worst stock market performance except for the US among the Group of Seven industrialized countries. Japan's economy fell into recession last year when it shrank in the second and third quarters. Since then it expanded 0.1 percent in the fourth quarter and 5.3 percent in this year's first quarter.
The US dollar remained higher against the yen and lower against the euro after a report on US durable goods orders presented a mixed picture. Orders overall climbed 5.5 percent in May, higher than the median forecast of a 1.5 percent increase among economists surveyed by Bloomberg. Excluding aircraft and other transportation equipment, orders fell 0.2 percent.
"It doesn't look like there is very good business spending," Fink said. "It looks like the rise was related to a one-off increase in defense spending."
The US dollar fell against the euro after failing to sustain a rally beyond US$1.20, a level unseen since August.
It traded at US$1.2092 at 5pm, from US$1.2039 late on Thursday. For the week, the dollar finished 1.6 percent higher.
"There's a huge amount of resistance and it looks like the traders have got frustrated in their attempts to take the euro lower," said Neil Mellor, a currency strategist at Bank of New York in London.
"Even though there are a lot of negative factors hitting Europe, there's now a tendency for the market to take a breather," he said.
The euro is being buffeted by speculation the European Central Bank will respond to a stagnating economy by reducing its benchmark rate for the first time since 2003.
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