TOKYO, Oct 20 (AFP): The dollar hovered close to a two- year high against the yen in Asian trade today, recovering some lost ground after profit-taking put the brakes on the US unit's recent solid run, dealers said.
The dollar rose to 115.60 yen in afternoon trade in Tokyo from 115.37 late Wednesday in New York, where the US currency hit 115.99 yen at one point-the highest level since September 2003.
The euro was lower at 1.1972 dollars from 1.1992 in New York. The single European currency at one point fell below the 1.19- dollar level late Wednesday for the first time since early July, dropping to 1.1876.
The euro was quoted at 138.44 yen in Tokyo from 138.34.
Wednesday's Federal Reserve's Beige Book report helped the dollar as it indicated the US economy continued to expand at a moderate pace in most regions after hurricanes Katrina and Rita, dealers said.
"The dollar will stay firm as market attention focuses on interest rate differentials," said Yoshihiro Nomura, forex manager at Trust and Custody Services Bank.
"It will take some more time for the dollar to break the 116- yen level," Nomura said.
Market watchers say that the US currency is likely to continue benefiting from heavy capital inflows into dollar- denominated assets given current positive interest rate differentials.