By Masayuki Kitano
SINGAPORE (Reuters) - The yen pulled up from a 4-1/2 year low against the dollar on Monday after Japan's economics minister said a further steady drop in the yen could have negative effects on households, pushing the dollar to a low of 102.00.
"People say the excessively strong yen has corrected quite a bit. If the yen continues to weaken steadily from here, negative effects on people's lives will emerge," Economics Minister Akira Amari told a Sunday talk show - sparking some buying back of the yen in a thin market.
The dollar, which gained last week on speculation that the U.S. Federal Reserve could soon begin to rein in its bond-buying programme, remained within sight of a near three-year high set on Friday versus an index of currencies.
Some Asian stock markets edged higher, boosted by U.S. equities hitting record closing highs on Friday as encouraging economic data prompted investors to buy into growth companies.
U.S. consumer sentiment rose to its strongest in nearly six years in early May, while a gauge of future economic activity rose in April to a near five-year high.
On Friday, the upbeat indicators had lent support to the dollar, which climbed last week on speculation that the Fed might taper its $85 billion in monthly bond purchases later this year.
Such chatter had increased after John Williams, president of the Federal Reserve Bank of San Francisco, said on Thursday the Fed could begin easing back on the monetary gas pedal this summer and end bond buying late this year.
The dollar fell to as low as 102.00 yen earlier on Monday. The greenback later pared its losses, and last fetched 102.86 yen, down 0.4 percent on the day. The dollar had risen to 103.32 yen on Friday, its highest level versus the Japanese currency since October 2008.
"It was on the back of those Amari comments ... especially after the big rally in dollar/yen on Friday. But thin liquidity is exacerbating the moves," said Sue Trinh, senior currency strategist at RBC in Hong Kong.
The dollar index, which measures the dollar's value against a basket of currencies, stood at 84.204, not very far from Friday's high of 84.371, its strongest level since July 2010.
In the stock market, MSCI's broadest index of Asia-Pacific shares outside Japan rose 0.3 percent, with Australian shares rising 0.9 percent, while South Korean shares were flat.
Japan's Nikkei share average touched its highest intraday level since December 2007, and was last up 1 percent
Gold tumbled 1.5 percent to a one-month low of $1,338.95, pressured by expectations the Fed could soon halt its asset buying programme.
Brent crude rose 0.1 percent to $104.73 a barrel.(Additional reporting by Ian Chua in Sydney; Editing by Eric Meijer)
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