Yen takes a breather with dollar benefiting from stronger US data

Asian shares were mixed on Thursday in the wake of a reading on China's economy showing growth in the services sector moderated and the US dollar strengthened. China Caixin services purchasing mangers' index (PMI) was published at 51.8 for April, but despite continuing to show expansion, eased off March's 52.2 reading.

The Nikkei 225 finished down 3.1 percent on Monday, and has been closed since for public holidays while other Asian markets in South Korea, Indonesia and Thailand were closed Thursday for public holidays.

In the forex market, the Dollar Index, which measures the greenback against a basket of currencies, continued its three-day rebound, rising to 93.36 by the time of writing, a solid bounce from lows not seen since January 2015 under 92 earlier this week.

The yen showed signs of fatigue on Thursday after taking a step back from its recent highs, as the greenback was lifted by optimism the US economy could bounce back after nearly stalling in the first quarter.

USD/JPY rose to 107.29 overnight, pulling away from an 18-month trough of 105.55 set on Tuesday. EUR/JPY rose to 123.13, off a three-year low of 121.665 hit last Friday.

Prime Minister Shinzo Abe on Wednesday warned Japan will act if necessary to weaken the yen, although many believe the bar is high for any market intervention.

The Aussie dollar bounced back 0.5 percent to 0.7510 versus the buck, lifted by upbeat Australian data, including a better-than-expected rise in retail sales in March. AUD/USD is still down about 1.4 percent for the week, having tumbled after the Reserve Bank of Australia cut interest rates on Tuesday.

Meanwhile EUR/USD held steady around 1.1480, continuing to consolidate after a run-up to an eight-month peak of 1.1616 earlier in the week.

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