The U.S. dollar fell against the euro and the yen in Monday trading in Asia as last week's rally subsided and strong trade figures helped boost the Japanese currency.
The dollar was trading at 104.84 yen by midafternoon in Tokyo, down 0.80 yen from late Thursday and below the 105.74 yen it bought later in New York. Japanese financial markets were closed Friday for a national holiday. The euro rose to US$1.2936 Monday afternoon from US$1.2814, and to 135.65 yen from 135.34 yen.
The dollar was mostly lower against other regional currencies, edging down to 1,026.3 South Korean won from 1,033.5 the previous day, and to 38.415 Thai baht from 38.545.
The dollar was pushed down by Finance Ministry trade data released early Monday that showed Japan's December trade surplus jumped more than expected.
"The current account data sparked dollar-selling as it came at a time when some were beginning to suspect there are downside risks to the dollar," said Akifumi Uchida, senior foreign exchange manger at Sumitomo Trust and Banking in Tokyo.
Uchida said some players saw a great opportunity to sell the dollar after buying the U.S. currency last week.
Japan's current account surplus grew 35.1 percent in December from a year earlier to 1.616 trillion yen (US$15.3 billion; euro11.9 billion). The current account is a broad measure of trade, tourism and investment.
Data on Japan's industrial output, released later Monday, underlined optimism about Japan's economy and also helped lift the yen against the dollar.
The Ministry of Economy, Trade and Industry said that revised industrial production fell 0.8 percent on month in December compared with a preliminary reading of a 1.2 percent decline.
"The dollar could fall further toward 104.50 yen or 104.00 yen later in the global session as overseas players react to the positive news out of Japan," said Minoru Shioiri, foreign exchange manger at Mitsubishi Securities.
But players are unlikely to take too much action ahead of remarks expected from U.S. Federal Reserve Chairman Alan Greenspan later this week, Shioiri said.
Greenspan is scheduled to speak before a Senate panel Wednesday and a House panel on Thursday.
The greenback's rebound got a major boost last week from Greenspan's comments that played down the dangers of the U.S. current account deficit. But the dollar suffered a sell-off later in the week after the release of Commerce Department data on the U.S. trade gap.
The dollar has begun a recovery in recent weeks from its plunge last year on concerns about the massive U.S. trade and budget deficits.
Traders believe that Washington finally may be getting serious about reining in spending to bring the deficits under control. But no one expects a quick fix to the deficit problem, and traders have been unsure how long the dollar's strength will last.