The yen fell on Thursday as sharp gains on Wall Street led by consumer shares along with the surge in oil, gold, and other base metals have offset persistent concerns about the viability of the U.S. banking system, dampening the Japanese currency's safe-haven appeal.

In late New York trading, the dollar rose 1.2 percent to 98.71 yen while euro surged to a session high of 133.93 yen before stabilizing, last seen at around 133.30 yen, up 0.6 percent. The increase in risk appetite also triggered gains in commodity currencies and Australian dollar climbed 1.3 percent higher to 69.28 versus the yen while New Zealand dollar touched its highest level in four months at 57.09 yen.

Against the dollar, the euro slid 0.4 percent to $1.3525, after falling as low as $1.3501 and the British pound was under pressured after data showing that U.K. retail sales in February were much weaker than expected, cable dropped to a session low of $1.4422 and shed 0.7 percent to $1.4444 in late New York afternoon session. The New Zealand dollar, meanwhile, surged to a 10-week peak to US$0.5803 with the Australian dollar also rose versus the greenback to US$0.7022, up 0.7 percent on the day.

U.S. stock markets extended their best monthly gain since 1987 on Thursday as Best Buy Co. and ConAgra Foods Inc posted better-than-expected earnings reports while prospects of lower costs at General Motors Corp. also helped. By the end of New York trading, the Dow Jones Industrial average rose 174 points, or 2.25 percent to 7,924, while Standard & Poor’s 500 index and Nasdaq Composite index added 2.33 percent and 3.8 percent, to 832 and 1,587 respectively.

On the data front, the Commerce Department said U.S. economy shrank at a 6.3 annual pace in Q4 (the worst performance since 1982), larger than the previously estimated 6.2 percent drop. The GDP report also showed corporate profits dropped 16.5 percent in the fourth quarter from the previous three months, the biggest decline since 1953, while another report showed that initial jobless claims rose 8,000 to 652,000 last week, topping 600,000 for an eighth straight time. Total benefit rolls jumped by 122,000 in the week ended March 14, from 5.44 million the previous week, indicating American are spending longer periods out of work.

On Friday, economic data releases include Japan Tokyo CPI, National CPI and retail sales, German import price index, Switzerland’s KOF indicator, U.K. GDP and current account, and U.S. personal income, personal spending, PCE data and University of Michigan survey.