TOKYO (AFX-ASIA) - The yen turned top-heavy against the dollar in midafternoon trade after hitting 132.30, pressured by profit-taking, dealers said. Investors also turned cautions during the afternoon after a local report cited Bank of Japan deputy governor Yutaka Yamaguchi as saying that the central bank will continue to watch forex market movements, dealers said. Dealers said overall, the yen moved solidly against the dollar, benefiting from gains by the equity market here, as well as the developments out of the Middle East. "Tension in the Middle East, as well as rise on the Nikkei made the dollar top-heavy today," a dealer with a local trust bank said. "In addition, investors currently hold dollar-long positions, seeking the US unit actively on expectations that foreign investment will increase from the new fiscal year," he said, adding that it is possible that the dollar will fall below the 132.00 level. However, the dealer also said that he does not think current sentiment towards the dollar against the yen is weak. "The dollar turned top-heavy against the yen because of these factors. I don't think the dollar is trading in weak sentiment against the yen at the moment," he said. He said the even if the dollar falls below 132.00, the US unit will be well-supported at 131.50. "I think currently, dollar/yen is in a correction phase. After this phase, I think the dollar will trade stronger against the yen," he said. "In addition, we can not see any improvement in Japanese politics. I think that the dollar will benefit from that," he added. Yesterday, prime minister Junichiro Koizumi reiterated his stance that he has no plan to dismiss agricultural minister Tsutomu Takebe over his ministry's response to BSE. The euro was rangebound against the major currencies ahead of the European Central Bank governing council meeting, dealers said. Dealers said the ECB will likely hold its rates steady at today's meeting. The dealer said euro/dollar will continue rangebound for the time being, with no fresh leads. "If the euro rises to 0.8850, a further rise in the euro will be possible," the dealer added.