The Canadian dollar shook off early losses and closed higher Friday even as oil prices fell sharply as a massive earthquake slammed Japan and the latest employment data missed expectations.

The currency was ahead 0.48 of a cent at 102.98 cents US.

Statistics Canada said the economy cranked out 15,100 new jobs. The tiny pickup in jobs overall, all part time, was below the consensus expectations of as many as 25,000 new jobs, but large enough to keep the unemployment rate at 7.8 per cent.

"This latest showing of lacklustre Canadian data must leave even the most hawkish of Bank of Canada watchers with severe doubt where future rate hikes are concerned," commented CanadianForex vice-president John Curran.

A magnitude 8.9 earthquake slammed Japan's northeastern coast Friday afternoon.

The yen initially fell after the quake and resulting tsunami, but then recovered as investors expect the Japanese to buy back their home currency.

Oil prices stepped back amid concerns that the Japanese economy, the world's third largest, will suffer a setback.

"You have seen oil go down on this and the effect it will have on overall demand," said Luciano Orengo, portfolio manager at Manulife Asset Management.

The April crude contract on the New York Mercantile Exchange fell $1.54 to US$101.16 a barrel.

Even with Friday's decline, crude oil is still up about 10 per cent from the middle of last month on worries that fighting in Libya could spread to big oil producers in the Persian Gulf, such as Saudi Arabia.

Copper prices recovered early declines with the May contract up one cent at US$4.21 a pound. Copper has plunged almost eight per cent since mid-February as worries about higher energy prices have raised concerns about demand.

Commodities were also under pressure after data showed China's inflation remained elevated in February at 4.9 per cent, exceeding analysts' forecasts and above the government's four per cent target for the year. Food price inflation unexpectedly accelerated to 11 per cent from January's 10.3 per cent rate.

The concern is that China will have to take further steps to slow its economy to deal with inflation, such as interest rate hikes.

China has been one of the main pillars of the global economy over the past few years and its huge demand for commodities had driven oil and metals prices sharply higher.

Bullion prices climbed with the April bullion contract in New York ahead $9.30 at US$1,421.80 an ounce.