TOKYO - The euro eased against the dollar in Asian trade Friday while the yen lost ground as currency markets reacted to slower-than-expected Chinese growth and a failed North Korean rocket launch.

The euro bought US$1.3171(S$1.65) in Tokyo morning trade, down from US$1.3199 late Thursday in New York where the single currency edged up on easing investor fears over the eurozone's fiscal woes.

The European single currency was trading at 106.77 yen Friday, against 106.65 yen in New York. The dollar firmed to 81.08 yen from 80.74 yen.

"Market players were in a slightly risk-off mood after the Chinese data," said Daisuke Karakama, market economist at Mizuho Corporate Bank.

"The currency market was hardly affected by North Korea's launch," he added.

However the failed launch removed an overhang which had weighed on the stock market in Japan, which had put its military on standby over fears it could mistakenly land in Japanese territory.

"Participants are somewhat relieved after the apparent failure of the launch," Kenichi Hirano, operating officer at Tachibana Securities, told Dow Jones Newswires.

South Korean and Japanese officials said Pyongyang had launched the rocket but it exploded in mid-air before splashing down in the Yellow Sea off the Korean peninsula.

China meanwhile released a raft of economic data Friday, saying its economy grew by a lower-than-expected 8.1 per cent in the first quarter, the slowest pace in nearly three years.

The expansion in gross domestic product was the slowest since the first quarter of 2009 and lower than the 8.9 per cent rise in the fourth quarter last year as turbulence in Europe and the United States curbed business activity.