The Ifo German business climate survey helped ease some of the concerns over the global economy recovery that had been revived by data on Thursday showing new claims for US employment benefits rose last week.
Crude oil prices rose for the third day in a row and world equities were steady after falling 0.5 percent the previous session.
Talk that Tokyo was intervening in the market to weaken the yen for the second time this month had helped the Nikkei share benchmark cut its losses by boosting the shares of exporting companies, though the index ended 1 percent lower when no confirmation of the intervention rumours emerged.
That still left investors edgy and with risk aversion hitting markets, traders said the Bank of Japan?s task of weakening the yen was becoming even tougher.
?The price action certainly suggested that the Japanese intervened, but one can?t be sure,? said Kenneth Broux, markets strategist at Lloyds TSB Financial Markets.
?With stock markets retreating and a general pullback in risk appetite, the yen and the Swiss franc will be supported, making the BoJ?s job harder.?
The US currency added 0.2 percent to 84.53 yen after rising as high as 85.40 earlier in the day. The greenback is still down 9 percent this year against the yen, which tends to strengthen when concerns mount over global growth.
The dollar had had fallen to 84.26 yen on Thursday, its lowest level since Tokyo intervened last week, and traders said major Japanese banks were now bidding it up.
The euro was up 0.7 percent at $1.3407 after the Munich-based Ifo think tank said its business climate index, based on a monthly survey of some 7,000 firms, rose to 106.8 from 106.7 in August. The shared currency added 1 percent to 113.34 yen. reuters
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