Tokyo - The dollar rose against the yen in Asia on Wednesday as investors await the end of the US Federal Reserve's policy meeting to find out its plans for its stimulus programme.
The greenback bought 102.91 yen in Tokyo, up from 102.63 yen in New York on Tuesday but still well off a five-year high of 103.93 yen reached at the end of last week.
The euro, buoyed by improving eurozone inflation data, strengthened to $1.3772 and 141.75 yen against $1.3765 and 141.28 yen.
Fed policymakers will wrap up their two-day meeting after debating whether the economy is strong enough to immediately scale back its $85-billion a month quantitative-easing (QE) programme.
Analysts are split on whether it will act right away or wait until early in the new year as fourth-quarter data flows in. A pullback is usually a plus for the dollar.
“Firmer data, especially in the US jobs market over recent weeks, and the recent budget deal have raised the odds of tapering being announced (Wednesday) although a move in January still looks more likely,” Credit Agricole said.
“Whether the Fed takes its foot off the QE pedal (Wednesday) or in January is probably a moot point, however, as the bottom line is that tapering is very much going to happen and markets will need to adjust sooner rather than later.”
With US November housing starts figures also set to be released on Wednesday, dealers said they are keeping a close eye on statements from Fed chief Ben Bernanke about US economic conditions and any Fed move on interest rates.
Currency markets hardly moved after data out of Tokyo showed the nation's trade deficit expanded 35.1 percent on-year in November, driven by soaring energy costs in the wake of the Fukushima nuclear crisis.
The yen has been under pressure on expectations the Bank of Japan, which holds a two-day meeting this week, will unveil further easing measures to counter slowing growth.
The dollar was also mostly higher against other Asia-Pacific currencies.
It edged up to Tw$29.69 from Tw$29.63 on Tuesday, to 1,052.35 South Korean won from 1,051.75 won, and to 44.29 Philippine pesos from 44.16 pesos. The unit also rose to 12,181 Indonesia rupiah from 12,126 rupiah, and to 32.23 Thai baht from 32.02 baht.
The Australian dollar was at 89.05 US cents from 89.42 cents but the greenback slipped to 61.87 Indian rupees from 61.96 rupees.
The Chinese yuan changed hands at 16.91 yen against 16.97 yen. - AFP