The US dollar rebounded slightly against the yen and the euro in Asian foreign exchange trading on Friday.

According to Thomson Financial the US dollar reached 119.22 yen at 03:00 GMT, having traded earlier at 118.88. Meanwhile, the euro fell to $1.3743 from $1.3750 earlier in the day.

The dollar's recent decline was reportedly caused by fears over weakness in the US real estate sector and the sub-prime mortgage market, which saw the currency fall to a 26-year low against the pound.

However, Yuuki Sakurai, a manager at Fokoku Mutual Life Insurance, told Bloomberg that conditions within the market may be improving.

"The overall picture of the sub-prime issue is becoming clear and investors think the impact will be very limited,'' he remarked.

Last week, the chairman of the Federal Reserve Ben Bernanke said he expected losses made on sub-prime loans to amount to approximately $100 billion.