TOKYO, JAPAN - THE yen fell against the dollar and the euro in Asia on Thursday as rebounding stock prices and global interest rate cuts led investors to sell the safe-haven Japanese currency, dealers said.

The dollar was changing hands at 98.30 yen in Tokyo afternoon trade, up from 97.61 yen in New York late on Wednesday.

In another sign of the global crisis easing, the euro went above US$1.30 for the first time since October 22. The single European currency rose to US$1.3215 from US$1.2938 in New York.

The euro, which earlier this week slumped to a more than two-year low against the dollar, also jumped against the yen. It rose to 129.88 yen from 126.20 in New York.

Japan's Nikkei stock index closed nearly 10 per cent higher on Thursday after a half-point interest rate cut by the US Federal Reserve, despite modest losses overnight for the Dow Jones on Wall Street.

'As the yen strengthened so rapidly recently, the regaining of calm on the stock market led to moves to unwind the excessive flight to the yen,' said Saburo Matsumoto, chief foreign exchange strategist at Sumitomo Trust Bank.

The yen last week soared to a 13-year high against the dollar as investors considered the low-yielding Japanese currency to be a safe haven amid the turmoil.

'The period of panic yen-buying seems to be over,' said Minoru Shioiri, a

senior dealer at Mitsubishi UFJ Securities, told Dow Jones Newswires.

The Federal Reserve cut its key lending rate to 1.0 per cent, matching a historic low, in news welcomed by investors.

The euro's fall took a breather amid expectations that 'Europe, despite its inflation fears, is keeping step with the rest of the world in the direction of credit easing' to help bolster the economy, Mr Matsumoto said.

European Central Bank president Jean-Claude Trichet said on Monday that another cut in interest rates was 'possible' next month, after a reduction this month as part of rare concerted action by leading central banks around the world.

In Germany, Chancellor Angela Merkel said on Wednesday she would unveil a 'targeted, courageous and sustainable' scheme to help avert a deep recession in Europe's biggest economy.

Speculation is also growing that the Bank of Japan will follow suit on Friday by cutting its already super-low 0.5 per cent interest rates to shore up Asia's largest economy.

'If the BoJ cuts its rates tomorrow and stock prices continue to rise, the dollar and euro are likely to climb a tad higher against the yen,' said Akira Kato, a senior dealer at Bank of Tokyo-Mitsubishi UFJ.

The dollar dropped against other regional currencies.

It fell to 1,249 South Korean won from 1,431 on Wednesday, to 1.4576 Singapore dollars from 1.5036, to 48.66 Philippine pesos from 49.13 and to 34.77 Thai baht from 34.90.

The greenback also eased to 32.87 Taiwan dollars from 33.30 and to 10,620 Indonesian rupiah from 11,050.