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The yen gained against the dollar and the euro on Friday, buoyed by expectations that repatriated funds could flow in to pay for repairs after a major earthquake rocked Japan.

The yen recovered after an initial knee-jerk reaction to sell the currency drove it to a two-week low against the dollar, and analysts said it could stay choppy on near-term worries about the impact on a shaky Japanese economy.

Worries about growth saw investors cut exposure to risk, leading to selling of higher-yielding currencies. The euro was also seen vulnerable to a sell-off if a euro zone summit later in the day fails to ease concerns about sovereign debt.

The dollar held just above 82.00 yen, with traders reporting large bids and stops at that level. Near-term support for the dollar also lay near its March 7 low of 81.95 yen.

The dollar was down 0.8 percent at 82.24 yen JPY=, pulling away from the two-week high of 83.29 yen hit in the Asian session. Solid offers from Japanese exporters above 83 yen were seen capping any upside for the U.S. currency.

 

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