Dollar rises versus yen in Asia trade ahead of US, Japan rate meetings

The dollar rose against the yen Monday in Asia but its gains were limited as investors turned cautious ahead of central bank policy meetings in the U.S. and Japan rate-setting.

The greenback was quoted at 104.58 yen midafternoon in Tokyo, up from 104.26 yen late Friday in New York. The euro edged up to US$1.5656 from US$1.5635.

While the dollar held firm on buying from exporters, traders said investors were cautious ahead of U.S. and Japanese monetary policy meetings on Tuesday and Wednesday respectively.

The U.S. central bank's policymakers begin a two-day meeting on Tuesday to decide whether to lower interest rates again and to issue an updated assessment of the U.S. economy and financial
system.

Most investors believe the Federal Reserve will lower rates by another quarter percentage point, and that it will also suggest it will pause before raising rates further.

On Wednesday, the Bank of Japan will also hold its monetary policy meeting.

Traders said trading would be quiet in the coming week with many investors away from the market during Japan's Golden Week holidays, which kick off this week.

"Also bolstering the dollar is buying from Japanese trust funds, who regularly buy at the end and the start of the month," said Yuji Saito, head of foreign exchange at Societe Generale.

The Tokyo foreign exchange market is closed on Tuesday and from May 3 through May 6.

In other Asian currencies, the dollar hardly moved against the Thai baht, standing at 31.70. The greenback was quoted at 1.3598 to the Singapore dollar, down from 1.3614 in New York late Friday.(**)