* Dollar falls versus yen, rises against euro
* Euro hurt by weak data, NZ dollar falls to 9-month low
* U.S. consumer spending fell in April, inflation subdued
By Wanfeng Zhou
NEW YORK, May 31 The dollar fell to a three-week
low against the yen on Friday after Japan reported accelerating
factory output and ebbing deflation and after U.S. data reduced
expectations the Federal Reserve could soon scale back its
But the U.S. currency was headed for its eight straight
month of gains versus the yen, with many analysts expecting
further yen weakness on expectations of aggressive monetary
easing by the Bank of Japan.
U.S. consumer spending fell in April for the first time in
almost a year and inflation pressures were subdued, pointing to
a slowdown in economic activity and supporting expectations of
the Fed maintaining its monetary stimulus.
"The dollar pared overall gains after another batch of
lackluster data suggested talk of Fed tapering might be a bit
premature," said Joe Manimbo, senior market analyst at Western
Union Business Solutions in Washington.
The dollar fell 0.1 percent to 100.59 yen, its lowest
since May 9. Traders said it extended falls after stop-loss sell
orders were triggered on the break below Thursday's low of
100.46, though strong support was expected at 100 yen.
The euro fell against the dollar, hurt by month-end flows
and data showing record high unemployment and low inflation.
The euro fell 0.5 percent to $1.2988, off Thursday's
three-week high of $1.3061.
The weak euro zone data raised concerns European Central
Bank policymakers may ease monetary policy further, although a
Reuters poll showed most economists think the ECB will stay on
The dollar index, which measures the dollar's value against
a basket of six major currencies, rose 0.3 percent to 83.259
and was poised to end up 1.8 percent on the month.
Commodity-linked currencies fell sharply, with the New
Zealand dollar dropping to a nine-month low of $0.7970. It was
last down 1 percent at 0.7989. The Australian dollar
fell 0.7 percent to $0.9589.