The dollar advanced Thursday as nervous traders tried to assess the uncertain outcome of U.S.Japanese talks aimed at avoiding American trade sanctions against Japan.

The dollar declined early in the day in Asian dealings over pessimism about the talks and new evidence of U.S. economic weakness. But traders who had bet the dollar would fall in Europe bought it instead as a protective hedge, which helped strengthen the dollar.

In late New York trading, the dollar was quoted at 84.55 Japanese yen, up from 84.05 late Wednesday. The dollar also was changing hands in New York at 1.3973 German marks, up from 1.3830.

Canada .7270 1.3756 France .2045 4.8910 Germany .7160 1.3966 Great Britain 1.5965 .6264 Italy .000610 1639.00 Japan .011827 84.55 Mexico .161290 6.2000