By Hiroyuki Kachi 
 

The yen weakened moderately against its rivals during Asia trade Friday, as Japanese currency authorities' talking failed to give a new direction to the perceived safety of the Japanese currency.

The greenback rose to Y112.70 at around 0450 GMT after falling as low as Y111.88 early morning. That compared with Y112.37 late Thursday in New York and a fresh 15-month low of Y110.98 set late afternoon during Asia time Thursday.

"The underlying trend has clearly changed," said Daisaku Ueno, chief FX strategist at Mitsubishi UFJ Morgan Stanley, adding that the dollar is "clearly pointing downward" against the yen over the next several months.

Global investors have fled riskier assets for the safety of traditional haven assets such as the Japanese currency and U.S. Treasurys, as continued oil-price declines and a sharp selloff in global stocks have deepened the mood of risk aversion.

Despite the Bank of Japan's decision late last month to impose negative rates for the first time, the yen has failed to weaken and instead strengthened by more than 8% or 10 yen in less than two weeks, as investors rushed to safety.

In addition, speculative players betting on a risk-off mood have found it easier to buy the yen aggressively to test how far the Japanese currency can strengthen, for example when trading was relatively thin on Japan's national holiday yesterday.

On Friday, with the yen strengthening further to fan worries about corporate earnings, the Nikkei Stock Average briefly dove to a level not seen since October 2014. The benchmark index dropped 3.5% midday, on track to end lower for the third straight session.

The yen showed muted reaction to jawboning from currency authorities about the rapid pace of its strengthening. Japanese Finance Minister Taro Aso on Friday sent a warning to investors about the surging yen, saying the government will "act appropriately" in the currency markets.

Investors remained jittery as they saw headlines that BOJ Governor Haruhiko Kuroda, along with Japan's top currency bureaucrat Masatsugu Asakawa, entered the prime minister's residence during the lunch break.

After meeting with Prime Minister Shinzo Abe, Mr. Kuroda told reporters the central bank will closely watch the yen's movement, although he declined to detail what they spoke about.

For now, the dollar will likely show a technical rebound after being oversold from earlier this month over the short term, said Mr. Ueno. But he said the dollar's fall this much against the yen may prompt investors to change their strategy to sell on recovery, thus weighing down the dollar's upside but making its downside fragile.

The Japanese currency also weakened against the euro, which gained to Y127.40 from Y127.21 late Thursday. The U.K. pound rose to Y163.02 from Y162.63, while the Australian dollar grew to Y80.05 from Y79.77.

In other currency-pair trading, the euro was at $1.1300 from $1.1326.

The WSJ Dollar Index, a measure of the dollar against a basket of major currencies, was up 0.11% at 88.88.

 
Interbank Foreign Exchange Rates At 00:50 EST / 0450 GMT 
 
                           Latest       Previous   %Chg    Daily    Daily   %Chg 
Dollar Rates                               Close            High      Low  12/31 
 
USD/JPY Japan           112.72-73      112.42-43  +0.26   113.03   111.92  -6.30 
EUR/USD Euro           1.1299-302      1.1323-26  -0.21   1.1335   1.1295  +4.05 
GBP/USD U.K.            1.4468-70      1.4477-79  -0.06   1.4492   1.4461  -1.81 
USD/CHF Switzerland     0.9741-45      0.9723-27  +0.19   0.9753   0.9716  -2.76 
USD/CAD Canada          1.3910-15      1.3936-41  -0.19   1.3940   1.3891  +0.53 
AUD/USD Australia       0.7100-04      0.7107-11  -0.10   0.7129   0.7093  -2.54 
NZD/USD New Zealand     0.6667-73      0.6714-20  -0.70   0.6739   0.6662  -2.39 
 
Euro Rate 
 
EUR/JPY Japan           127.35-39      127.28-32  +0.05   127.66   126.78  -2.61 
 
Source: Tullett Prebon 
 

Write to Hiroyuki Kachi at Hiroyuki.Kachi@wsj.com

(END) Dow Jones Newswires

February 12, 2016 00:53 ET (05:53 GMT)