TOKYO (AFX-ASIA) - The dollar was slightly lower against other major currencies due to uncertainties over the prospect of military operations in Afghanistan, dealers said. Investors, in particular, were becoming increasingly wary of economic risks related to the attacks in Afghanistan, they said. Daiwa Institute of Research economist Junichi Makino said that even if the military operation lasts two years, it will cut US GDP may by a total of 1.5 percentage points in such period. "So, we need to continue to pay close attention to any developments in Afghanistan," Nomura Trust and Banking Co Ltd foreign exchange deputy manager Teruhisa Moriyasu said. The dollar, however, will continue to see firm downside support,especially against the yen on fears over possible intervention by the Japanese authorities, dealers said. Finance Minister Masajuro Shiokawa said the government will intervene in the foreign exchange market if necessary, based on its own judgement rather than as part of a concerted international action. "There is the generally-agreed view that intervention will be carried out before the dollar reaches the 118.50 yen level," Moriyasu said. The decline in the local equity market and the uncertainty over the impact of increased political tension in central Asia on the Japanese economy also supported the downside of the dollar, dealers said. DIR's Makino said that the Sept 11 terrorist attacks and the subsequent air strikes in Afghanistan by the US and its allies, even if resolved within one year, may cause Japanese domestic demand to fall by some 2 trln yen in the year to March 2003. The euro was firmer against the dollar thanks to the continued flight-to-safety asset flow following the launch of air strikes in Afghanistan, dealers said. "It all depends on the Afghan situation, but the euro, under present circumstances, may test the 0.9350 usd level," Moriyasu said.