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Dollar rally fizzles in Asia

Tokyo - The dollar edged down against the yen in Asia on Friday after rallying on good economic data, with the first confirmed Ebola case in New York City (NYC) hitting investors' risk appetite.

The greenback bought ¥108.00 in Tokyo afternoon trade, slipping from ¥108.27 in New York but still well above ¥107.24 in Tokyo earlier on Thursday.

The euro bought ¥136.70, down from ¥136.93 in US trade, while it inched up to $1.2656 from $1.2647.

The safe-haven yen lost ground on Thursday with risk sentiment lifted by encouraging Chinese manufacturing data, solid readings for eurozone business activity and good US jobs data.

The dollar rose into the ¥108 range but the rally ran out of steam in Asia.

"It was all going so very well, until red headlines (early Asian time) hit the screens saying that a patient was being tested at Bellevue hospital in NYC for suspected Ebola," National Australia Bank said in a note.

"This news had the effect of bringing the dollar-yen rate - the current... bellwether for global risk sentiment - down 30 points from ¥108.35 to ¥108.05," it said in a note.

A doctor who recently returned to New York from treating Ebola patients in Guinea tested positive for the deadly virus on Thursday.

Credit Suisse analyst Hiromichi Shirakawa warned against too much risk-taking driven by speculation about monetary policy, including questions about whether the European Central Bank will start buying riskier corporate bonds.

Investors are also keeping an eye out for signs of any delay in the Federal Reserve's pullback on its stimulus drive, amid rising speculation that a weak economy will force the Bank of Japan to unleash fresh easing measures.

"This return to the 'risk-on' sentiment comes basically from speculation about and hopes for policy measures," Shirakawa said in a note.

"But the policy authorities are unlikely to be as friendly as financial markets think."

The dollar strengthened against other Asia-Pacific currencies.

It climbed to 32.41 Thai baht from 32.33 baht on Thursday, to Sg$1.2762 from Sg$1.2723 and to Tw$30.40 from Tw$30.39.

It also rose to 1 057.85 South Korean won from 1 055.90 won, to 61.28 Indian rupees from 61.26 rupees, to 12 071.00 Indonesian rupiah from 12 010.00 rupiah, and to 44.81 Philippine pesos from 44.76 pesos.

The Australian dollar weakened to 87.61 US cents from 87.64c while the Chinese yuan firmed to ¥17.64 from ¥17.53.

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