The U.S. dollar shed some of its overnight gains against major currencies in Thursday Asian trading as players sold the currency to lock in profits.
The dollar was trading at 108.48 yen midafternoon in Tokyo, up 0.42 yen from late Wednesday here but below the 108.68 yen it bought in New York later that day.
The euro rose to US$1.2914 Thursday afternoon in Tokyo from US$1.2884 late Wednesday and 140.08 yen from 139.30 yen.
The dollar was mixed against other regional currencies, edging up to 9,485 Indonesian rupiah from 9,474 the previous day, but slipping to 1,012.4 South Korean won from 1,016.5. It rose to 39.635 Thai baht from 39.580.
The dollar met selling in Asia after failing to break above 109 yen overnight in New York.
"With no new economic data to buy dollars on, many players spent the day selling to book profits," said Minoru Shioiri, senior foreign exchange manager at Mitsubishi Securities in Tokyo.
But remarks earlier in the day by Bank of Japan Gov. Toshihiko Fukui that some analysts interpreted as preparation for a policy change failed to accelerate dollar-selling, traders said.
Policy changes by the Bank of Japan tend to support the yen against the dollar. Right now, the bank keeps plenty of cash flowing in the financial system to keep the economic recovery going, and has kept interest rates at zero.
Fukui said that if the bank changes its liquidity target, it shouldn't be regarded as a tightening of its easy monetary policy.
In overnight New York trading, the dollar remained little changed against the euro but rose against the yen.
With no major U.S. economic data Wednesday, the market largely brushed off testimony from Federal Reserve Chairman Alan Greenspan to a Senate committee on government sponsored enterprises.
The market is expecting the U.S. Federal Reserve to keep raising interest rates this year, helping nudge the dollar higher despite nagging worries about the U.S. trade and budget deficits.
After languishing last year, the dollar has been boosted lately by the expectations of higher U.S. rates, which tend to make securities denominated in dollars more attractive.