The dollar was mostly higher in domestic and foreign trading Friday but fell sharply against the yen as investors regained some confidence in the Japanese currency. Gold prices were lower. Analysts said a rise in interest rates in Japan and a recovery on the Tokyo Stock Exchange after a string of steep losses helped support the yen, which itself has fallen sharply in recent weeks. Jack Barbanel, president of First Global Asset Management Inc., said traders believed Japanese yields would go even higher, which would make the yen even more attractive. The dollar fell to 154.30 yen in New York from 155.095 late Thursday. In Tokyo early Friday, the dollar rose 0.24 yen to a closing 155.07 yen, and in London, it was quoted at a sharply lower rate of 153.85 yen. Overseas dealers said the dollar was hit in afternoon dealings by a report, later denied, that Japan was moving to issue dollar-denominated bonds in a bid to add a layer of intervention to help the sagging yen. The dollar also was hit by profit-taking before Friday's talks between Treasury Secretary James Brady and his Japanese counterpart, Ryutaro Hashimoto, in Los Angeles. Barbanel said the dollar's strong showing against other currencies was due partly to higher interest rates in the United States, and also to concerns about tensions between the Soviet Union and Lithuania. The dollar is seen as a safe haven in times of international political strife. Other late dollar rates in New York, compared with late Thursday's quotes, included: 1.7135 West German marks, up from 1.7028; 1.5200 Swiss francs, up from 1.5120; 5.7720 French francs, up from 5.7415; 1,260.25 Italian lire, up from 1,255.50; and 1.17505 Canadian dollars, down from 1.17575. Other late dollar rates in Europe, compared with late Thursday's prices, included: 1.7100 West German marks, up from 1.7054; 1.5179 Swiss francs, up from 1.5150; 5.7645 French francs, up from 5.7505; 1.9249 Dutch guilders, up from 1.9210; 1,258.50 Italian lire, up from 1,255.50; and 1.1751 Canadian dollars, down from 1.1757. The pound recovered somewhat from its recent slide on Britain's economic woes and political uncertainty. In London, the pound rose to $1.6040 from $1.6015 late Thursday, but it fell in New York to $1.6010 from $1.6040. Gold fell $5.10 a troy ounce on the Commodity Exchange in New York, closing at $388.90. Later, Republic National Bank of New York quoted a bid of $389.10 a troy ounce, down $4.90. Gold fell in London to a late bid price of $386.95 a troy ounce from $393.05 bid late Thursday. In Zurich, the metal fell to a closing bid of $391.50 from $393 late Thursday. Earlier, in Hong Kong, gold rose 13 cents to close at a bid $393.65. Silver fell 4.1 cents to $5.043 a troy ounce on the Commodity Exchange. In London, silver fell to a late bid price of $5.04 a troy ounce, down from Thursday's $5.08.