Dollar mixed in Asia after Bernanke comments

Bernanke quelled speculation over an early end to the Fed's huge monetary easing programme, telling a Senate panel in Washington that it was having an impact but was still needed to get the economy back on track.

The dollar weakened to 91.63 yen in early Tokyo trade, from 91.93 yen late Tuesday in New York, while the European single currency weakened to $1.3046 from $1.3061 and to 119.56 yen from 120.08 yen.

Bernanke's comments suggested he "still appears to believe that the benefits (of easing) outweigh the costs, but the net benefits will continue to shrink as the Fed buys more assets this year," said London-based Capital Economics.

The Fed chief also sounded the alarm over huge US budget cuts looming within days which could deal a heavy blow to the fragile US economy.

Italy's inconclusive national elections raise fears about whether debt-hit Rome would continue with its unpopular austerity measures aimed at paying down its debt.

Investors fear failure to do so could have repercussions around the eurozone.

Markets will be looking to Italian bond auctions later in the day to gauge confidence in the country's fiscal health with the sales "likely meet firm demand given the recently-high yields and small amount of each issuance", said Barclays Bank currency strategist Bill Diviney.

"Still, we can't rule out that the tenders turn out to be poor due to the ongoing jitters," which could weigh on the euro, he told Dow Jones Newswires.

While dealers have moved into the safe-haven yen, the unit is still facing downward pressure after reports that Tokyo would this week nominate a supporter of aggressive monetary easing to become the next Bank of Japan governor.

The British pound fell further in Tokyo trade, to $1.5111 from $1.5126 in New York, after Moody's last week yanked Britain's triple-A credit rating, citing weak growth and heavy public debt.