The dollar rose against the yen in Asia on Thursday, rebounding from overnight falls amid political uncertainty in Japan, analysts said. The dollar rose to 81.31 yen in Tokyo morning trade from 80.92 yen in New York late Wednesday. The greenback fell below 81.00 yen to hit its lowest level in two weeks in New York as weak jobs and manufacturing data sparked concerns over US economic outlooks. The dollar rebounded in Asia despite lower stock prices. "The dollar turned up in an autonomous reaction to the overnight falls. It also gained support due to the shaky political situation in Japan," said Mizuho Corporate Bank market economist Daisuke Karakama. "Lower stock prices usually spawn risk aversion and lead to yen buying. Given the earthquake, nuclear crisis and now this political shake up, however, the currency of such a country can hardly attract buying," he said.
Japanese Prime Minister Naoto, already struggling with recovery efforts after the earthquake and tsunami in March that sparked a nuclear crisis, faces a no-confidence vote on Thursday. A sizeable revolt is expected from his own party, leaving the result balanced on a knife edge. If Kan lost the vote he would have to resign or call fresh elections. The euro was mostly flat against the dollar in Tokyo, buying $1.4353 against $1.4331 in New York on Wednesday when the single currency took a beating as news of Moody's downgrade of Greek debt hit the market.