- Dollar also weighed ahead of closely-watched US jobs report
- Dollar index edges further away from 2-week highs
- Graphic: World FX rates in 2018 http://tmsnrt.rs/2egbfVh
The dollar slipped against the yen on Friday after a report suggested that Japan would be the next country with which U.S. President Donald Trump will take up trade issues.
The U.S. currency was also lower against other major peers such as the euro and pound, with the market bracing for the highly anticipated U.S. jobs report due later in the session.
According to CNBC television, President Trump hinted to a Wall Street Journal columnist that he might next take up trade issues with Japan.
Trump has already challenged China, Mexico, Canada and the European Union on trade issues. He has repeatedly accused other countries of devaluing their currencies and putting the United States at a disadvantage.
The dollar extended overnight losses and last traded at 110.44 yen JPY= for a loss of 0.3 percent.
"In addition to dollar/yen, other currencies have also declined against the yen. Although the real motive behind Trump's comments is still unclear at this stage, the market has taken note of the possibility of Japan being affected by a broader trade conflict," said Shusuke Yamada, currency and equity strategist at Bank of America Merrill Lynch in Tokyo.
The euro was down 0.25 percent at 128.335 yen EURJPY= and the pound had shed 0.3 percent to 142.72 yen GBPJPY= .
The dollar index against a basket of six major currencies .DXY was little changed at 95.014 after losing about 0.2 percent on Thursday, pulling further back from a two-week peak scaled on Tuesday amid turmoil in emerging market currencies.
In focus was the August U.S. non-farm payrolls report due at 1230 GMT. The U.S. economy is expected to have added about 191,000 jobs in August, with average earnings at 0.2 percent month-on-month compared to 0.3 percent from July.
The Federal Reserve is poised to hike interest rates this month, its third monetary tightening move in 2018, and the employment data is expected to shape investors' near-term outlook on interest rates.
The euro was nearly flat at $1.1622 EUR= , having gained about 0.15 percent this week.
The pound was steady at $1.2924 GBP=D4 after rising 0.15 percent the previous day. Sterling was down 0.3 percent on the week.
The Australian dollar was 0.2 percent lower at $0.7183 AUD=D4 , edging back towards a two-year low of $0.7145 plumbed on Wednesday against a broadly stronger greenback.
China's yuan was slightly stronger at 6.8402 in offshore trade CNH=D4 , reversing the previous day's modest losses.
