The US dollar stayed firm against major currencies in early afternoon trade in Tokyo, backed by commercial demand and short-covering, dealers said "The dollar climbed higher on the back of commercial needs, purchases of cross-yen from mutual funds and short-covering by short-term funds overseas," said Harry Ida, senior currency analyst at Thomson Financial's IFR Forex Watch. "However, the dollar ran out of steam in Asia after a wave of purchases had once waned, with many overseas market players away already on holidays," he said, adding that trading tends will likely be dominated by short-term speculators. At 1.25 pm (0425 GMT) in Tokyo, the dollar stood at 116.64 yen, compared to 116.16 earlier in Sydney and 116.02 in late New York trading. One euro was buying 1.1983 usd, compared to 1.2005 usd in Sydney and 1.2011 in New York. Ida said the dollar may keep its firm tone in the near term particularly against the yen given the interest rate differential in the US and Japan with the federal funds target rate at 4.25 pct versus zero rates in Tokyo, despite the Fed hinting last week that its tightening cycle may soon end. "The dollar had fallen sharply in recent sessions with players unwinding their long dollar positions, but market bias for [a stronger dollar] in the long-term remains unchanged," he said