In Japan the shock resignation of a top prime ministerial aide annoyed an already stagnant stock market while a central banking statement ruling out an early interest rise turned the screws on the Australian dollar.

Despite ongoing violence in its southern regions, Thailand's baht managed to hold its own against the dollar while a flurry of off-loading on the South Korean market was tempered by a supply of US dollars from export earners.

Japanese Yen: The yen eased against the dollar during the week as the local stock market remained stagnant and a top aide to Prime Minister Junichiro Koizumi quit over a pension scandal, dealers said.

The Japanese unit stood at 110.34 to the dollar late Friday, down from 110.11 to the dollar a week earlier.

The yen plunged to an intra-day low of 110.50 yen on Friday after Chief Cabinet Secretary Yasuo Fukuda announced his resignation following the disclosure that he had failed to pay contributions to national pension plans.

Amendments to the pension system, under discussion in parliament, are central to Koizumi's reforms and the revelation has caused public outcry.

The scandal implicating many other politicians, sent Tokyo shares lower, discouraging foreign exchange investors from holding the yen, dealers said.

The Tokyo Stock Exchange's benchmark Nikkei-225 index dropped 132.52 points or 1.15 percent to end 11,438.82 after losing 1.62 percent the previous day.

Japanese financial markets resumed trading Thursday after being on holiday for the first three days of the week.

"Investors reacted negatively to the news, speculating that other ministers in the Koizumi cabinet could resign over the scandal," said Mitsuru Sahara, vice-president of foreign exchange division at UFJ Holdings.

"As Fukuda is set to go, the public will ask 'why not other ministers?' Investors are worried the scandal could lead to a political uncertainty," Sahara said.

Australian Dollar: The Australian dollar sank below 72.00 US cents Friday and may face continuing pressure next week following an upbeat central bank statement virtually ruling out any early interest rate rise, analysts said.