Dollar firm in Asia as dealers await Fed

The dollar edged up in Asia on Tuesday as investors await the outcome of a US Federal Reserve meeting for an idea of when it will begin to reel in its massive stimulus drive.

The greenback stood at ¥94.83 n Tokyo in the afternoon, from ¥94.67 in New York late Monday.

The euro also rose to ¥126.66 from ¥126.52, but weakened to $1.3355 from $1.3363.

The Federal Open Market Committee will issue a statement on Wednesday after a two-day policy meeting, which will be quickly followed by a briefing from the bank's chairman, Ben Bernanke.

Markets have been in turmoil for weeks on speculation the central bank will announce a tightening of its $85 billion-a-month asset-buying programme, known as quantitative easing (QE).

A Financial Times report said Bernanke would likely signal the Fed is close to tapering the purchases but would temper that with arguing a move would depend on conditions in the world's largest economy.

A mixed bag of US data recently has pointed to an uncertain recovery with many analysts predicting the Fed would hold off cutting back on QE for the time being.

"The market is sensitive," Fabian Eliasson, head of currency sales at Mizuho Bank, told Dow Jones Newswires.

"There's just too much uncertainty about the Fed's next move."

Euro trading was stable ahead of reports on the manufacturing sector in the recession-hit eurozone scheduled for later in the day.

The dollar was mostly stronger against other Asia-Pacific currencies Tuesday.

The Australian dollar slipped to 95.18 US cents from 96.16c, while the Chinese yuan fetched ¥15.45 from ¥15.43.