The US dollar was rangebound against the yen in early afternoon trade, with market participants in Asia reluctant to push the unit up or down, dealers said. But dealers said the market bias remains towards a firmer yen on growing expectations that the Japanese economy will finally emerge from its prolonged difficulties. UFJ Bank dealer Shigetake Nakayama said the Japanese currency will likely benefit from foreign investors stepping up purchases of Japanese equities. In July, foreign investors were net buyers of 1.373 trln yen worth of Japanese equities, the Ministry of Finance said Bank of Tokyo-Mitsubishi senior dealer Kenji Kobayashi had a similar assessment, adding the dollar's failure to climb back decisively overnight despite upbeat US capital flows data suggested speculators are more likely to test the dollar's downside than upside. The US Treasury Department reported the US attracted foreign inflows worth 71.2 bln usd in June, the largest tally since Febuary. This is more than sufficient to cover its trade deficit, the Treasury data showed. "(Yen-bulls) should get a boost from a steady inflow of foreign funds, rising yields (in lead JGBs) and hopes for the economy heading towards steady growth," said Kenji Kobayashi, senior dealer at Bank of Tokyo-Mitsubishi. But dealers said bids near the 109 yen level involving option plays should support the greenback in the near term. At 12.20 pm the dollar was quoted at 109.41 yen, after moving between 109.30 and 109.49 here. Earlier in Sydney, it was at 109.33 yen and 109.22 in New York trade overnight. The euro stood at 1.2334 usd, compared to 1.2343 usd in Sydney today and 1.2370 usd in New York. Against the yen, it was at 134.98 yen here, after trading in a range of 134.77-135.30 here. This compares to 135.03 in Sydney and 135.08 in New York. Elsewhere, the euro was bearish against the yen in Asia, with overseas macro-driven funds actively assaulting the euro since New York trade. "In light of differences in economic growth between the eurozone and Japan, the euro could tumble to the 130-131 yen level in the future," according to UFJ's Nakayama. Against the dollar, dealers expect speculators to drive the single currency up to 1.25 yen in the near future, but there are substantial doubts that the euro can sustain gains above that level. UFJ's Nakayama said he expects the euro to trade in a range of 1.2250-1.2500 in the coming weeks.