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Dollar holds firm in Asia after topping 100 yen

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(Globalpost/GlobalPost)

The dollar held firm in Asia on Wednesday after breaking the psychologically important 100 yen mark for the first time in nearly a month.

The unit changed hands at 100.64 yen in morning Tokyo trade, almost flat from late Tuesday in New York, where it rose past the 100 yen mark for the first time since early June.

The greenback's strength came as solid US economic data bolstered the chance the Federal Reserve will taper its bond-buying programme, a move likely to send the dollar higher.

In other currency trading, the euro was slightly weaker at $1.2974 and 130.58 yen against $1.2978 and 130.60 yen in US deals.

Investors are focussing on a string of important US economic indicators later Wednesday as well as Friday's non-farm payrolls data, said Daisaku Ueno, senior forex strategist at Mitsubishi UFJ Morgan Stanley.

"The dollar was broadly stronger on expectations of the Fed's tapering of its bond-buying programme," he told Dow Jones Newswires, adding that whether the currency would be able to stay above 100 yen would depend on upcoming US data.

Meanwhile, campaigning for Japan's July 21 upper-house elections officially kick off Thursday.

If the ruling coalition wins a majority of seats, overseas investors could interpret the victory as voters giving a nod of approval to Prime Minister Shinzo Abe's economic policies, dubbed "Abenomics", which would be a yen-selling cue, Ueno said.

Since taking office in December, Abe has pushed for active fiscal spending while the Bank of Japan under governor Haruhiko Kuroda, handpicked by Abe, carried out massive monetary easing, sending the yen into a nosedive.

The moves sent the dollar above 103 yen before it fell back to the 94 yen mark by mid-June as investors flocked to the yen, traditionally a safe-haven currency, amid stock market turbulence.

On Wednesday, the euro also drifted lower against the backdrop of broad dollar strength, National Australia Bank said.

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http://www.globalpost.com/dispatch/news/afp/130703/dollar-holds-firm-asia-after-topping-100-yen