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TOKYO (AFP) - The dollar was steady at a three-month high against the yen in Asian trade Friday due to brighter prospects for the US economy and Japan's weaker-than-expected first-quarter growth, dealers said.

They said the dollar was lifted by better-than-expected US jobless claims data although trading was sluggish ahead of a weekend meeting of Group of Eight finance ministers in Germany.

The dollar was at 121.30 yen in Tokyo afternoon trade, up from 121.29 late Thursday in New York where it reached 121.35 at one point.

The euro fell slightly to 1.3488 dollars from 1.3492 and to 163.62 yen after 163.70 yen.

"Recent positive figures ... are wiping out lingering concerns about prospects for the US economy," said Masaki Fukui, senior market economist at Mizuho Corporation Bank's forex division.

Dollar-buying sentiment remained firm after US data showed the number of new claims for unemployment benefits fell by 5,000 to 293,000 in the week ended May 12, the lowest level for four months.

The latest Philadelphia Federal survey for May meanwhile rose to 4.2 from 0.2 in April, above expectations for a gain to 3.5.

"Dollar-buying sentiment was also supported by expectations that the Bank of Japan is unlikely to raise interest rates for now as Japanese economic data showed some weakness, particularly in production and investment," Fukui said.

The BoJ decided Thursday, as expected, to keep its benchmark interest rate unchanged at 0.5 percent after Japanese economic growth slowed sharply in the first quarter of 2007 to a quarterly pace of 0.6 percent.

Together with a surprise drop in machinery orders in March, the data underpinned analysts' expectations that the Japanese central bank is unlikely to raise interest rates again before the second half of 2007.

Players were reluctant to take out positions ahead of the G8 finance chiefs' meeting due to get underway later Friday in Potsdam, near Berlin.

"It is not likely that G8 members will directly say something about foreign exchange rates but there is a possibility that they may touch upon the Chinese yuan, which may have some impact on the market," Fukui said.

The dollar rose to 33.381 Taiwan dollars from 33.348 on Thursday, to 932.55 South Korean won from 928.10, to 8,810 Indonesian rupiah from 8,805 and to 1.5274 Singapore dollars from 1.5244.

The greenback eased to 46.64 Philippine pesos from 46.73 while holding steady at 33.35 Thai baht.