TOKYO (AFX-ASIA) - The dollar/yen was lower in midmorning, with weak data from the US overnight used as an excuse to liquidate yen-short positions after the failure to break through resistance between 125 and 126 yen, dealers said. They noted that the dollar remained relatively firm against the euro after the weak manufacturer data due to the already large outstanding euro-long positions, with investors preferring instead to reduce their short-yen positions. "The fact is simply that the market was long on the dollar/yen and the NAPM index and other recent indicators have been weaker than expected," ABN Amro head of foreign exchange Toshihiko Masaki said. "If the US economic figures are weak, it should be the euro/dollar which goes higher, but the market is already long on the euro," he said. "The most popular positions have been yen-short. Short-yen position liquidations are pushing the dollar lower," he said, citing the activity of US hedge funds who had earlier bought the dollar around 124.20-50 yen. "So far 125-126 yen is very strong resistance," Masaki said, adding that exporter sell orders placed around these levels ahead of the long summer break in Japan have helped to slow the dollar's ascent. He said breaks of the mid-124 level in New York and Sydney trading prompted stop-loss selling, pushing the dollar still lower, with this level now offering some immediate resistance for the US currency. Masaki said that, even if the European Central Bank seems more likely to raise rates tonight than previously, the euro is unlikely to see immediate strong gains, also due to the build-up of long-euro positions. "The euro/dollar has been bought for the last eight to nine weeks consistently. For the next couple of days, position adjustments will put a cap on the euro," he said.