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Dollar holds steady in Asia

Tokyo -The dollar held steady against the yen in Asian trade Tuesday amid uncertainty about the Federal Reserve's plans for its huge stimulus programme.

In Tokyo afternoon trading, the greenback bought ¥98.87, nearly unchanged from New York overnight but down from levels above ¥99 in Asia earlier Monday.

The Fed last week surprised markets by keeping its bond-buying scheme unchanged, confounding economists who had expected the bank to begin reeling it in as the US economy shows signs of strengthening.

On Friday, two days after the Fed announcement, senior bank official James Bullard said the cutbacks could still come this year.

But on Monday, other Fed officials reinforced the message that the central bank needed to see more concrete improvement in the economy before cutting back on the $85bn-a-month bond-buying scheme.

"Dovish remarks... yesterday failed to lift market sentiment as investors remained cautious over Fed tapering amid contrasting signals from officials," Credit Agricole said.

In other trading, the euro was at $1.3494 against $1.3493 in New York and well off the $1.3529 touched in Asia Monday, while it also eased to ¥133.31 from ¥133.37.

The single currency suffered selling after European Central Bank chief Mario Draghi voiced concern Monday about rising interest rates on the interbank markets and said the ECB could provide fresh liquidity.

The euro's initial uptick after German chancellor Angela Merkel clinched her third term in a convincing election victory Sunday proved to be short-lived.

"The 'sell the news' response to the German election also obscured any favourable reaction to good German, French and eurozone services (data)," National Australia Bank said.

The dollar was mixed against other Asian currencies.

The greenback rose to 11 156 Indonesian rupiah from 11,495 rupiah on Monday, to Sg$1.2533 from Sg$1.2494 and to Tw$29.58 from Tw$29.55.

It also rose to 31.27 Thai baht from 31.13 baht, to 62.69 Indian rupees from 62.53 rupees, and to 43.35 Philippine pesos from 43.15 pesos.

The US unit sagged to 1 075.28 South Korean won from 1 076.24 won.

The Australian dollar slipped to 94.13 US cents from 94.26 cents, and the Chinese yuan sank to ¥16.12 from ¥16.20.


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