Dollar rises in Asia as expectations for U.S. rate cut fades

The dollar rose in Asia Wednesday as expectations receded for a cut in U.S. interest rates.

The dollar was trading at 121.64 yen midafternoon, up from 121.57 yen late Tuesday in New York. The euro rose to US$1.3460 from US$1.3454.

"Recent robust U.S. economic data have rolled back concerns over a near-term slowdown and lifted long-term yields," said Hiroshi Imaizumi, senior trader at Resona Bank.

Imaizumi and others said the dollar could continue rising for a while and break past this year's high of 122.20 yen.

Whether the yen can manage a turnaround depends on the course of the Bank of Japan's monetary policy, traders said, and market participants will be zeroing in on consumer price data due Friday for clues.

"Most players think the BOJ will not raise interest rates for now given the current economic conditions in Japan," said Osao Izuka, head of foreign-exchange trading at Sumitomo Trust & Banking.

Japan's core consumer price index is expected to have fallen 0.1 percent on year in April, following a 0.3 percent decline in the previous month, according to economists polled by Dow Jones Newswires.

The dollar was mostly higher against other regional currencies, gaining to 8,700 Indonesian rupiah from 8,679 the previous day, 40.568 Indian rupee from 40.24, and 931.3 South Korean won from 930.4.