* Dollar index off eight-week peak, still up on week
* Revised Q1 U.S. GDP disappoints, but shrugged off as historical
* Euro drifts off 3-mth trough, vulnerable ahead of ECB June 5 meeting
By Ian Chua
SYDNEY, May 30 (Reuters) - The yen nursed modest losses early in Asia on Friday, having retreated from multi-month highs against the euro as investors booked some profit before the weekend.
The euro fetched 138.39 yen, off a four-month low of 137.98. Still, it was on track to end lower for a fourth straight week.
Similarly, the greenback climbed off a one-week low of 101.42 to last stand at 101.74. On the week, the dollar was down 0.2 percent.
“Expectations for a step-up in the pace of BOJ quantitative easing are currently running low, one reason the yen has recently been strengthening,” said Ray Attrill, strategist at National Australia Bank in Sydney.
Trading was subdued overnight with most of Europe closed for the Ascension holidays. The lack of conviction was clear with the dollar index just a touch softer at 80.485, not far from an eight-week peak of 80.581 set mid-week.
Investors generally dismissed revised data that showed the U.S. economy contracted for the first time in three years in the first quarter, given more timely data has suggested a recovery following a severe winter.
“Despite the ugly headline, the details of the revision are actually favourable for second quarter GDP,” analysts at JPMorgan wrote in a note to clients
“Almost all of the revision was due to a downward-revised estimate of the pace of inventory accumulation in Q1, which should allow for a more rapid pace of production this quarter as businesses are operating with less of an inventory overhang.”
The euro, meanwhile, drifted up to $1.3603 from a three-month trough of $1.3586. Barring a further recovery, it is likely to end lower for a fourth straight week.
Traders expect the common currency to remain under a cloud heading into the June 5 policy review by the European Central Bank, from which some sort of policy action is now widely expected.
ECB Executive Board member Yves Mersch said this week that next week’s meeting could yield a combination of policies to tackle low inflation and low credit growth.
Among the best performers overnight was the Australian dollar, which climbed 0.8 percent to a 1-1/2 week high of $0.9313.
The market warmed to the currency after Australian companies revised up their spending plans for the fiscal year starting July, boosting the outlook for the economy.
As usual, there was next to no reaction to data showing Japan’s core consumer prices jumped 3.2 percent in April from a year earlier and household spending fell more than expected in the same month following a sales tax hike.
India’s first quarter GDP data due 1200 GMT is the next key indicator in Asia. (Editing by Eric Meijer)