The Australian dollar eased on Friday as soft Asian stock markets gave investors an excuse to take profits from recent gains.

At midday, the local unit was buying 94.92 US cents, down from Thursday's local finish of 95.63 cents. Still, it is up 1.2 percent for the week and 6.7 percent for the month.

On Wednesday night, the Aussie reached 96 cents, the highest since it touched 97.92 cents on July 25, 2008.

Colonial First State head of investments markets research Stephen Halmarick said the domestic dollar had come under pressure as equity markets around the region slumped, following the falls in US stocks.

''There was also some profit taking after the big gains'' in the local dollar, he said.

Mr Halmarick said the domestic currency could decline a bit further if Asian equities kept falling.

Japan's Nikkei average fell 1.5 per cent on Friday after a weak reading on the US job market pushed down shares on Wall Street.

Nevertheless, he said it was likely to be backed and would probably rise higher in the coming weeks.

Meanwhile, Australia's yield curve continued to flatten as investors bet domestic rates may rise soon. Three-year bond futures gain 0.02 points to 95.10, and 10-year futures up 0.045 points at 94.91.

The Reserve Bank of Australia indicated earlier this week in a speech by Governor Glenn Stevens and in the minutes of the September board meeting that the domestic economy was strong and would probably need interest rates to increase.