Dollar higher against yen in Asian trading

The dollar rose against the yen Friday in Asia as Japanese investors sold the yen to buy higher-yielding foreign assets.

The U.S. dollar was trading at 123.44 yen midafternoon, up from 123.18 yen late Thursday in New York. The euro rose to US$1.3456 from US$1.3432.

Traders said, however, that dollar-selling by Japanese exporters is likely to cap the U.S. currency's rise at a little below 123.80 yen for now. Many players may also stay to the sidelines ahead of the Bank of Japan's quarterly "tankan" business sentiment survey due Monday, traders said.

Most traders will be keeping an eye on the tankan, but said the outcome is unlikely to have a significant impact on currency markets.

Even a strong tankan result wouldn't make it any easier for the BOJ to hike rates in July because other recent data have been weak and Japan's parliamentary elections during the month would make any BOJ policy move a politically sensitive one, traders said.

And "even if the data are weak, the forward-looking stance of the BOJ suggests the tankan data won't affect the timing of the next rate hike," said Satoshi Okagawa, head of the foreign-exchange forward trading group at Sumitomo Mitsui Banking Corp.

Economists surveyed by Dow Jones Newswires expect the tankan's most-watched index measuring large manufacturers' views on business conditions to be 23, unchanged from the previous survey.

The index measures the percentage of companies reporting that business conditions are better minus those reporting that conditions are worse. The higher the number, the more companies that are optimistic.

Against other regional currencies, the dollar was mixed, rising to 32.850 Taiwan dollar from 32.840 the previous day. It fell to 924.8 South Korean won from 926.8.