Dollar softens in Asia after Wall St rally

TOKYO: The dollar eased in Asia Thursday, paring gains in New York after the US Federal Reserve kept its stimulus programme in place but gave an upbeat view of the economy dealers took as a hint at a wind down soon.

The greenback bought 98.45 yen in Tokyo against 98.52 yen in New York but well up from 98.14 yen earlier Wednesday in Tokyo.

The euro fetched $1.3729 and 135.16 yen in Asia, from $1.3738 and 135.35 yen.

The Fed, as expected, held steady on its $85 billion per-month bond-buying programme, underscoring the need to continue support for the sluggish economy.

However, dealers noted that it did not downgrade its view of the economy, increasing speculation it may start scaling back the programme as early as December.

The bank has said in the past it will only begin reeling in its programme when the economy shows signs it is able to stand on its own.

Kathy Lien, managing director at BK Asset Management, said after the Fed statement: "We believe that the central bank will wait until March of 2014 to make a move but the mere possibility of December tapering, no matter how small it may be, was enough to cause a pop in the dollar."

The dollar has been supported by the prospect of an end to the monetary easing as it would leave less cash washing around the financial system, increasing demand for the unit.