The U.S. dollar fell sharply against the Japanese yen yesterday after Japan announced it would relax currency controls in an effort to ease recent pressures on the yen. The dollar had marginal gains in Europe, but weakened in New York.

Meanwhile, gold prices fell back by some $2 an ounce from Thursday's sharp rises, but finished the week as much as $4 ahead of last Friday's closing. In London, gold dropped to $250.55 from Thursday's $252.50. In Zurich, the main bullion market, the metal shed $1 to close at $251.375.

In Tokyo the dollar forged ahead to close at 215 yen, a two-yen gain over Thursday's close of 213 yen, but it plummeted to 211 yen in New York.

In Zurich the dollar eased to 1.7176 Swiss francs from 1.7184 Thursday. But elsewhere it was higher.

In Frankfurt it closed at 1.9002 deutschemarks up from 1.8986; in Paris at 4.388 francs against 4.38325; in Brussels at 31.2850 Belgina franc, up from 30.15; in Amsterdam at 2.069 guilders, up from 2.0675; and in Milan at 848.20 lire, up from 847.45.

In London the pound weakened to $2.0430 from $2.0495 and it fell to $2.0405 in New York.