Dollar weaker in Asia as Obama, Abe holds talks

The dollar weakened in Asia on Thursday with traders eyeing a visit by US President Barack Obama to Japan hoping for some progress on stalled talks over a Pacific-wide free-trade zone.

The greenback changed hands at 102.34 in Tokyo midday trading, down from 102.50 yen in New York Wednesday.

The euro bought $1.3819 and 141.49 yen, against $1.3816 and 141.61 yen in new York, where the single currency won support from an upbeat report on eurozone business activity.

Obama, who arrived in Tokyo Wednesday on the first leg of a four-nation tour, held talks with Japanese Prime Minister Shinzo Abe Thursday morning. Among the top items on his agenda was moving ahead on the Trans-Pacific Partnership trade agreement.

Talks over the proposed pact -- which encompasses 12 nations including the US and Japan -- have been held up as Tokyo and Washington lock horns over key details, including Japanese tariffs on agricultural products.

Top negotiators from both sides have spent days seeking a breakthrough over the dispute, which will entail painful political choices that could inflame anti-free trade advocates on both sides of the Pacific.

Japanese economy minister Akira Amari was scheduled to hold a news conference Thursday afternoon in Tokyo following the summit, with some local media reporting the two countries may strike a deal.

But Osamu Takashima, chief FX strategist at Citi Bank Japan, said any impact on currency markets could be limited.

"It is unclear how much the market would respond over the short term, as hedge funds and others are substantially reducing their risk tolerance," Takashima said.

On Wednesday, Wall Street saw a sell-off after US new-home sales dived 14.5 percent in March from a year earlier, the second successive month of slower sales.

The euro was steady against the dollar after Markit Economics said its Eurozone Composite Purchasing Managers Index for April, a leading indicator of manufacturing and services activity, jumped to its highest reading since May 2011.

-- Dow Jones Newswires contributed to this report --