TOKYO, Dec 8 (AFP): The dollar inched lower on profit-taking Thursday in the run-up to the release of today's (Friday) revised gross domestic product (GDP) data in Japan which many expect to beat the preliminary estimate last month, dealers said.
The dollar was slightly lower at 120.70 yen in afternoon Tokyo trade from 120.99 yen in New York late Wednesday.
"The dollar was traded in narrow ranges on position adjustment. When it went above 121 it was sold and investors bought on its dips," said Mamoru Ashimoto, deputy general manager at Shinsei Bank.
But it "seems premature to say that the bull-run of the dollar is completely over now," Mitsubishi UFJ Securities foreign exchange manager Minoru Shioiri said.
The euro fell to 141.41 yen from 141.92 yen in New York.
On Tuesday the euro hit a record 142.82 yen in early European trade while the dollar was close to 121.39 yen, the highest point since March 2003.
The euro was little changed at 1.1722 dollars in Tokyo trade against 1.1723 in late New York.
Shioiri said dealers were cautious on the yen ahead of the release Friday of Japan's revised GDP for July to September and next week's Tankan report on business confidence.
The yen has been weighed down by zero interest rates in Japan, which contrast with rising yields in the United States as well as indications the Bank of Japan is unlikely to intervene to stem the decline of the currency.
"There is a mild bias towards seeing the US dollar a little bit stronger, and why not if fundamentals count," Macquarie Bank currency strategists said in a market note in Sydney.
There has been considerable speculation too that the government of Prime Minister Junichiro Koizumi is pressuring against any early tightening of Bank of Japan monetary policy given concerns that such a move could stall the long-awaited Japanese economic recovery.
Bank of Japan Governor Toshihiko Fukui signalled again Thursday that the central bank could tighten monetary policy next year and hit back at government pressure.
Ashimoto said the market has already factored in the apparent friction between the Bank of Japan and the government.
"Since the law stipulates the independence of the Bank of Japan, I don't think the market truly believes it will change its policy because of government pressure," he said.
In afternoon trading, the dollar fell to 1,034.2 South Korean won from 1,034.8 Wednesday, 41.27 Thai baht from 41.285, 53.715 Philippine pesos from 53.860 and 9,818 Indonesian rupiah from 9,870.
It was steady at 1.6854 Singapore dollars and rose to 33.528 Taiwan dollars from 33.428.