TOKYO: The dollar stayed firm Thursday after Federal Reserve chief Ben Bernanke suggested the Fed could taper its massive stimulus in the coming months.
The euro fell to $1.2842 in Tokyo morning trade from $1.2855 in New York late Wednesday and to 132.45 yen from 132.58 yen.
The dollar traded at 103.14 yen, slightly down from 103.31 yen in New York late Wednesday but up from 102.55 yen overnight.
The dollar-buying sentiment remained strong after Bernanke said the Fed may start trimming back on its $85-billion-a-month bond purchase programme, known as quantitative easing at one of its "next few meetings".
However, he warned, the time was not yet right.
"A premature tightening of monetary policy" could derail the recovery, he warned in the early part of his testimony.
"I think it's an over reaction, but his comments during the Q and A session are leading to USD gains," a senior dealer at a major British bank in Tokyo told Dow Jones Newswires.
Bernanke's comment also sustained the current yen-selling momentum, dealers said.
Expectations for Prime Minister Shinzo Abe's pro-spending, pro-growth policies have weakened the yen more than 20 percent against the dollar over the past six months and boosted share prices to their highest level in more than five years.
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