* Dollar index off eight-week peak, still up on week
* Revised Q1 U.S. GDP disappoints, but shrugged off as
* Euro drifts off 3-mth trough, vulnerable ahead of ECB June
By Ian Chua
SYDNEY, May 30 The yen nursed modest losses
early in Asia on Friday, having retreated from multi-month highs
against the euro as investors booked some profit before the
The euro fetched 138.39 yen, off a four-month low
of 137.98. Still, it was on track to end lower for a fourth
Similarly, the greenback climbed off a one-week low of
101.42 to last stand at 101.74. On the week, the dollar
was down 0.2 percent.
"Expectations for a step-up in the pace of BOJ quantitative
easing are currently running low, one reason the yen has
recently been strengthening," said Ray Attrill, strategist at
National Australia Bank in Sydney.
Trading was subdued overnight with most of Europe closed for
the Ascension holidays. The lack of conviction was clear with
the dollar index just a touch softer at 80.485, not far
from an eight-week peak of 80.581 set mid-week.
Investors generally dismissed revised data that showed the
U.S. economy contracted for the first time in three years in the
first quarter, given more timely data has suggested a recovery
following a severe winter.
"Despite the ugly headline, the details of the revision are
actually favourable for second quarter GDP," analysts at
JPMorgan wrote in a note to clients
"Almost all of the revision was due to a downward-revised
estimate of the pace of inventory accumulation in Q1, which
should allow for a more rapid pace of production this quarter as
businesses are operating with less of an inventory overhang."
The euro, meanwhile, drifted up to $1.3603 from a
three-month trough of $1.3586. Barring a further recovery, it is
likely to end lower for a fourth straight week.
Traders expect the common currency to remain under a cloud
heading into the June 5 policy review by the European Central
Bank, from which some sort of policy action is now widely
ECB Executive Board member Yves Mersch said this week that
next week's meeting could yield a combination of policies to
tackle low inflation and low credit growth.
Among the best performers overnight was the Australian
dollar, which climbed 0.8 percent to a 1-1/2 week high of
The market warmed to the currency after Australian companies
revised up their spending plans for the fiscal year starting
July, boosting the outlook for the economy.
As usual, there was next to no reaction to data showing
Japan's core consumer prices jumped 3.2 percent in April from a
year earlier and household spending fell more than expected in
the same month following a sales tax hike.
India's first quarter GDP data due 1200 GMT is the next key
indicator in Asia.
(Editing by Eric Meijer)