Dollar weakens in Asia after rally on retail sales

The dollar's rally on better-than-expected US retail sales fizzled in Asian trade Thursday while the euro also came under pressure after disappointing eurozone data.

The greenback pushed past the 96 yen level in US trading as the Commerce Department said retail sales gained 1.1 percent in February over the month before, boosting optimism about the world's biggest economy.

But the unit gave up those gains in Asia, fetching 95.92 yen in afternoon Tokyo trade, against the 96.14 yen close in New York Wednesday.

"No particular news is behind its fall, but unless the (dollar/yen) pair is able to recover the 96.00 level, it could continue falling toward 95.50," said a senior trader at a major bank in Japan.

The euro eased to $1.2947 and 124.21 yen against $1.2956 and 124.56 yen following a lacklustre Italian bond sale and weak eurozone factory output data, which showed a 0.4 percent on-month fall in January.

The figures were "a reminder that the eurozone remains in the grip of what looks likely to be a shallowish but extended recession", National Australia Bank said in a note.

Markets were unmoved as Japan's lower house of parliament confirmed a new management team at the Bank of Japan, as widely expected.

The final parliamentary green light is expected to come Friday with the upper-house approval.

"Confirmation of all of the government's BoJ nominees will send a positive signal that looser central bank policy monetary policy will be a certainty," said SMBC Nikko Securities general manager of equities Hiroichi Nishi.

Japanese media have said the largest opposition party would not back the nomination of Kikuo Iwata to serve as one of two BoJ deputy governors, throwing the focus on smaller opposition parties.

Iwata, along with the nominee for governor Haruhiko Kuroda, is a strong supporter of giving more control of the independent BoJ to the government, and is also an advocate of further aggressive monetary easing.

A vote against Iwata could dent Prime Minister Shinzo Abe's plans for a central bank team that supports his policy prescriptions to fix the world's third-largest economy.

However, his nomination was expected to narrowly pass in Japan's upper house of parliament Friday.

The dollar was mostly higher against other Asia-Pacific currencies.

It strengthened to Sg$1.2494 from Sg$1.2468 a day earlier, to 40.62 Philippine pesos from 40.61 pesos, to 54.45 Indian rupees from 54.15 rupees and to Tw$29.70 from Tw$29.65.

The greenback also firmed to 9,710 Indonesian rupiah from 9,692 rupiah and to 1,106.64 South Korean won from 1,098.30 won while edging down to 29.64 Thai baht from 29.65 baht.

The Australian dollar rose to $1.0367 from $1.0312 while the Chinese yuan was unchanged at 15.40 yen.

-- Dow Jones Newswires contributed to this article --