TOKYO (AFX-ASIA) - The dollar was rangebound against the yen in midafternoon trading ahead of the outcome of talks between US President George W Bush and Prime Minister Junichiro Koizumi, dealers said. "Although people do not believe that there will be any surprise announcement at the summit meeting, they are preparing for the contingency risk," UFJ Trust and Banking customer dealer Issaku Taguchi said. "If there is some surprising development on the use of public funds, then the yen may further appreciate." Dealers said that should the summit meeting fail to provide fresh trading leads, the dollar is likely to remain boxed in at a trading range of 132-135 yen. "Large option-linked sell orders are likely to continue to support the downside of the dollar below the 132 yen level, while continued capital repatriation by Japanese firms will make its top-side heavy, especially towards the 135 yen level," Taguchi said. Dealers said the underlying worries over prospects for the Japanese economy and the sovereign debt rating also continued to support the dollar's downside against the yen. "At any rate, there is no fundamental reason to believe that the ongoing appreciation of the yen will develop further," Taguchi said. The euro was lower against the dollar on profit-taking, with investors adjusting positions due to the closure of the US capital markets, dealers said. "Market players see no leads to test the 0.88 usd level for the euro, although they do not think the currency will collapse to below the 0.85 usd level," Taguchi said.