- The Japanese yen strengthened against the dollar in early Asian trade on Friday ahead of key consumer price data.

At 0830 Tokyo time (2330 GMT), Japan''s Ministry of Internal Affairs and Communications releases the consumer price index with March national core CPI (excluding perishables but including energy) forecast at a gain of 1.4% year-on-year, which would be a ninth straight year-on-year rise.

USD/JPY traded at 102.25, down 0.07%, in morning trade.

Overnight, the dollar traded lower against most major currencies after tensions between Russia and the Ukraine flared anew, prompting investors to avoid the greenback on fears the U.S. may be dragged deeper into the crisis.

Ukraine military forces killed five separatists earlier, while Russian President Vladimir Putin warned Kiev against stepping up its offensive against the rebels, sparking fears the U.S. will slap fresh sanctions on Moscow and turn the standoff up a notch.

Geopolitical tensions eclipsed overall positive U.S. data and sent investors chasing safe-haven yen positions, while markets took dovish comments from European Central Bank President Mario Draghi in stride.

The Commerce Department reported earlier that U.S. orders for durable goods rose 2.6% in March, beating expectations for a 2% gain.

Core durable goods orders, which exclude volatile transportation items, rose 2% last month, far outpacing forecasts for a 0.6% gain.

Separately, the Labor Department said the number of individuals who filed for unemployment assistance in the U.S. in the week ending April 19 rose by 24,000 to 329,000. Analysts had expected an increase of 5,000.

Despite the increase, underlying trends still point to recovery in the labor market, giving the dollar some cushion.

Meanwhile in Europe, ECB President Mario Draghi reiterated his stance that a strengthening euro could trigger further monetary easing, which capped the euro''s gains.

Speaking at a conference in Amsterdam, Draghi said the euro exchange rate is an "increasingly important factor" in monetary policy. The exchange rate is not a policy target in itself, but the bank’s monetary policy stance could be affected by a continued appreciation in the currency, Draghi added.

He also said the ECB could launch a "broad-based" asset purchase program if the medium-term inflation outlook deteriorated.

Elsewhere in Europe, German research institute Ifo reported that its business climate index rose to a two-month high of 111.2 for April from 110.7 in March, beating expectations for a 110.5 reading.

The US Dollar Index, which tracks the performance of the greenback versus a basket of six other major currencies, was down 0.01% at 79.84.

On Friday, the U.S. is to round up the week with revised data on consumer sentiment.

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