The US dollar rebounded slightly against leading currencies in early afternoon trade here with concerns about the upcoming general elections in Germany weighing on the euro, dealers said They added that after an initial spike in the yen on the back of the landslide victory by Japanese Prime Minister Junichiro Koizumij's Liberal Democratic Party in Sunday's polls, support for the local currency has faded for now "Because of uncertainty over the upcoming German election, the euro is most likely to be exposed to downside risk throughout the week," Tatsuro Karitani, a foreign exchange manager at Mizuho Corporate Bank said "In the process of pricing in this uncertainty, the euro could fall towards 1.22 usd," he said In addition, sentiment towards the euro has been dampened by concerns of a big shift by US firms away from euro-denominated assets, after semiconductor firm Intel announced a 6.0 bln usd capital repatriation, dealers said At 1:25 pm Tokyo (0425 GMT) the euro was at 1.2329 usd, down from 1.2392 usd in early Sydney trade and 1.2399 in New York late last Friday. The US unit also rose against the yen reaching 109.68 yen in local trade, from 109.40 yen in Sydney and 109.96 in New York Dealers noted that the dominating victory by the ruling LDP failed to lift the yen for long after some early upside in Sydney "But we still have to watch closely how overseas investors will react to the outcome and how the dollar/yen moves tonight," Karitani said Japanese Prime Minister Junichiro Koizumi's party won 296 seats, giving it an absolute majority in the lower house of parliament. Along with the 31 seats secured by its coalition partner, the New Komeito, the LDP coalition now controls two thirds of the lower house, meaning that it can pass bills even if the upper house rejects them "Judging from the outcome of the snap election, I think the possibility is high that foreigners will try to sell down the dollar against the yen tonight," Karitani said "And if the Japanese stock market maintains its strength, the dollar may be sold to the 107 yen level," he added