Dollar rise yen down

The dollar rose against the yen in Asian trade on Tuesday, supported by mounting expectations that the US central bank will be quicker than its Japanese counterpart to raise interest rates, dealers said. The dollar climbed to 91.35 yen in Tokyo afternoon trade from 91.15 in New York late Monday. The euro gained to 1.4288 dollars from 1.4281 and to 130.55 yen from 130.17. The dollar benefited from growing speculation that the Federal Reserve will raise interest rates next year earlier than predicted, dealers said. Investors generally prefer currencies offering the prospect of higher yields. In contrast, Japan's central bank has raised expectations that it will keep its key lending rate at the current level of 0.1 per cent for some time yet, declaring last week that it 'does not tolerate' deflation. But some analysts were sceptical about whether the dollar's rally would continue for much longer. 'We expect the dollar's recovery to stall any time now and anticipate another bout of weakness in the first quarter' of 2010, Dariusz Kowalczyk, chief investment strategist at SJS Markets in Hong Kong, wrote in a note. Investors were keeping an eye on final estimates of US and British gross domestic product for the third quarter due out later in the day.