The dollar rose in Asia Thursday on lessening prospects of a U.S. interest rate cut, and traders said the dollar may keep rising gradually.
The dollar was trading at 120.10 yen midafternoon, up from 120.02 yen late Wednesday in New York. The euro rose to US$1.3546 from US$1.3529.
The U.S. Federal Open Market Committee overnight made no changes in the tone of its statement, signaling it will leave the nation's 5.25 percent interest rate untouched for a while, traders said.
"The dollar will rise above 120.50 yen," in the long run, said Masashi Kurabe, a senior dealer at Bank of Tokyo Mitsubishi UFJ.
The dollar will climb slowly because many Japanese exporters are interested in selling at that level, he said.
Traders said the euro will maintain its upward trend if European Central Bank President Jean-Claude Trichet maintains his rosy economic outlook and signals a possible rate hike next month.
The dollar was mostly higher against other regional currencies, climbing to 47.165 Philippine peso from 47.12 the previous session, and 925.6 South Korean won from 923.5, but falling to 8,768 Indonesian rupiah from 8,815.