Tokyo - The dollar fell further in Asia on Friday, with investors discouraged by low yields on US bonds and caution ahead of market-moving events set for next week.

Dealers were unfazed by Japanese economic data released early on Friday, saying drops in spending and industrial output had been well expected.

The dollar fetched 101.51 yen in Tokyo at midday from 101.78 yen in New York on Thursday afternoon.

The euro bought $1.3604 against $1.3601 in US trade while falling to 138.12 yen from 138.44 yen.

“The dollar can hardly catch upward momentum given that US rates have fallen to the 2.4 percent level,” said Daisuke Karakama, head of spot forex trading at Mizuho Bank.

“There are few reasons for pushing with dollar buying ahead of market events next week” such as a policy meeting of the European Central Bank and US employment data, he said.

US bond yields fell to their lowest in nearly one year on Thursday as investors fled to safety due to a sharp downward revision in the US first-quarter gross domestic product.

Yields on the 10-year US Treasury bond briefly sank to 2.44 percent, a level last seen in June 2013, down from the 12-month peak of 3.0 percent.

Revised data from the US Commerce Department showed the economy contracted in the first quarter by 1.0 percent, double the amount analysts estimated.

The revision reversed the initial estimate of 0.1 percent growth,underscoring its struggle to gain momentum nearly five years after exiting recession.

The dollar was also under pressure due to selling by Japanese exporters related to business settlement ahead of monthly book closing, Shinji Kureda, head of FX trading group of Sumitomo Mitsui Banking, told Dow Jones Newswires.

The ECB has held its key interest rates at their current all-time lows since November.

But central bank chief Mario Draghi recently hinted that additional easing was on the cards so as to keep the eurozone economy flush with cash amid deflation concerns.

That could come in the form either of additional rate cuts. But other measures such as pumping more liquidity into the financial system are also seen as possible options. - AFP