TOKYO?(UPDATE) The dollar edged up in Asian trade Thursday as worse-than-expected US retail data dampened economic recovery hopes and raised demand for the safe-haven currency, dealers said.

The dollar rose to 95.65 yen in Tokyo afternoon trade from 95.20 yen in New York late on Wednesday. The euro edged down to $1.3585 from $1.3598 but firmed to 129.94 yen from 129.46.

The greenback was bought against most major currencies after an unexpected fall in US retail sales dented hopes that the worst of the economic slump is over.

"Investors are watching the share prices as the US retail sales report may push down the stock market and create a risk factor," said Saburo Matsumoto, chief forex strategist at Sumitomo Trust and Banking.

US, European and Japanese stock markets tumbled sharply after data showed that retail sales dropped 0.4 percent in April.

"The US dollar climbed as risk appetite fell victim to the pullback in equity markets," sai analysts at Standard Chartered. "Consistent dollar selling of the previous few weeks is beginning to dry up."

While the dollar was generally firmer against other major currencies in the wake of the new figures, it fell in US trade against the yen, which is also seen as a relatively safe bet in times of turmoil.

"The decline in sentiment towards global economic activity and worsening in investor risk-appetite increased demand for the 'safe-haven' dollar and yen," said NAB Capital analyst John Kyriakopoulos.

In Tokyo Japanese importers also bought the dollar at its lows, keeping the US currency above its New York low of 95.14 yen, which was briefly touched again early in the Asian session.

"Players are taking profits now," after the yen's gains on Wednesday, Hiroshi Maeba, a senior foreign exchange trader at Nomura Securities, told Dow Jones Newswires.

The yen was also supported by a remark from Japanese shadow finance minister Masaharu Nakagawa, who told the BBC that if the opposition takes power later this year it would not buy dollar-denominated US bonds.

"Although it is unrealistic for Japan not to buy dollar-denominated US bonds, his remark was a short-term positive for the yen," said Matsumoto.

Against Asian currencies, the dollar rose to 1.4664 Singapore dollars from 1.4567 a day earlier, to P47.61 from P47.29 in the Philippines, and to 10,380 Indonesian rupiah from 10,370.

It also climbed to 34.56 Thai baht from 34.46, to 32.94 Taiwan dollars from 32.84, and to 1,266.90 South Korean won from 1,243.80.