The dollar eased against the yen in Asia on Wednesday morning after an initial boost from upbeat US data as risk aversion grew with Tokyo share prices turning down.
The greenback fetched 97.69 yen in Tokyo, against 97.80 yen in New York late Tuesday. It was trading above the 98-yen level earlier in the day after figures pointed to more strength in the US economy and as worries temporarily eased over a credit crunch in China.
The euro bought $1.3080 and 127.78 yen against $1.3083 and 127.95 yen in US trade.
US figures showed new orders for durable goods surged 3.6 percent in May on the back of strong aircraft sales, while house prices and consumer confidence also saw healthy rises.
Tokyo's Nikkei 225 stock index initially jumped about 1.41 percent but it turned down by lunch. Yen trading and the index are closely interlinked as the value of the currency affects the profitability of Japanese exporters.
"The Nikkei had a strong start, but it's losing steam, leading to risk-averse yen-buying," Junichi Ishikawa, market analyst at IG Securities in Tokyo, told Dow Jones Newswires.
Osamu Takashima, head of forex strategy at Citigroup Global Market Japan, said "the main scenario for the (dollar-yen) pair is sideways trading for now but the risk lies on the downside".