TOKYO (AP) _ The dollar rose against the yen early Thursday after U.S. and British forces attacked Iraq for defying U.N. arms inspectors. Japanese stock prices fell.

The dollar bought 116.12 yen in early trading, up 0.50 yen from Wednesday in Tokyo and also above its level of 116.53 in New York.

The Nikkei Stock Average shed 178.97 points, or 1.27 percent, to 13,917.33 in the first 30 minutes of trading. On Wednesday, the average closed up 85.11 points, or 0.61 percent.

In currency dealings, the dollar moved as high as 117.17 yen at one point following the military action. But traders said the dollar then retreated slightly.

The dollar is often regarded as a safe haven in times of international unrest.

President Clinton said Wednesday that he ordered a ``strong, sustained series of airstrikes'' against Iraq in response to Saddam Hussein's continued defiance of U.N. weapons inspectors.

On the stock market, share prices opened lower following a decline earlier on Wall Street and news of the air strikes.

In New York, the Dow Jones industrial average fell 32.70 points to close at 8,790.60 Wednesday.

Traders said the air strikes against Iraq have raised fears that recession-stricken Japan will be faced with higher oil costs.

The broader Tokyo Stock Price Index of all issues listed on the first section fell 8.17 points, or 0.75 percent, to 1,085.22. The TOPIX closed up 4.12 points, or 0.38 percent, the day before.

Meanwhile, the yield on the 10-year Japanese government bond was unquoted in early trading. It settled at 1.330 percent on Wednesday and its price stood at 103.96 yen.