TOKYO: The dollar skidded lower against the yen in Asian trade Wednesday despite the increasing likelihood of a tapering of US stimulus in the coming months.
The dollar fetched 97.10 yen in Tokyo afternoon trade against 97.76 yen in New York Tuesday afternoon and the 98-yen range in Tokyo Tuesday, trading around the lowest level since late June.
The euro, meanwhile, fetched $1.3303 against $1.3306 and 129.30 yen from 130.10 yen in US trade.
Investors flocked to the safe-haven yen as risk sentiment retreated amid growing indications that the Federal Reserve will soon begin tapering its $85 billion-a-month quantitative easing programme, which has been credited with boosting global equity markets.
While a draw down on the stimulus would usually be seen as positive for the greenback -- shrinking the number of dollars in the financial system and thereby boosting demand -- markets have been nervous about the implications of the Fed's expected moves.
US trade numbers from the Commerce Department showed a narrowing trade deficit in June, which analysts said points to a likely upward revision to economic growth estimates.
The chiefs of the Federal Reserve's Chicago and Atlanta branches both said that the Fed could begin tapering the stimulus programme in September, but stressed that the world's largest economy needed to hold steady or improve.
Also on investors' radar screens is a Bank of Japan (BoJ) two-day policy meeting expected to wrap up Thursday, with analysts expecting the bank to hold off fresh easing measures.
In other trade, the Australian dollar bought 89.55 US cents compared with 89.23 cents immediately before the central bank on Tuesday cut interest rates to a record low of 2.5 percent.
National Australia Bank said there were "mixed interpretations of the lack of explicit reference to a continuing easing bias" in a post-rate cut statement, arguing further action could depend on more fresh economic figures.
"One thing of which there was no doubt yesterday is that the RBA (Reserve Bank of Australia) would welcome further AUD depreciation," it said.
"Should the currency not weaken further, this in itself adds to the case for further rate cuts," it said.
India's rupee, which hit a lifetime low of 61.51 to the dollar on Tuesday, was at 61.29 Wednesday afternoon.
The dollar was firmer against other Asia-Pacific currencies.
It edged up to 43.65 Philippine pesos from 43.53 pesos the previous day, to 10,304 Indonesian rupiah from 10,283 rupiah, to 31.47 Thai baht from 31.39 baht, and to 1,118.73 South Korean won from 1,115.51 won.
It also strengthened to Sg$1.2681 from Sg$1.2677 while holding steady at Tw$29.95.
The Chinese yuan changed hands at 15.85 yen against 15.99 yen.
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