The dollar made gains by the close of the Tokyo market today, supported by fears of more intervention and strong manufacturing US data but the long-term trend was still gloomy, dealers said.
The dollar briefly broke through 120 yen and firmed to around $0.9820 against the euro by late trade as short-holders unwound their positions ahead of the US Independence Day holiday on Thursday and US payroll data due on Friday.
The firm tone carried over into Asian trade, where the US currency advanced to 120.00/03 yen by 7 a.m. Irish time.
The euro was at $0.9835/40, from $0.9916 in late U.S. trade.
"The market was trying to test the euro to parity. But after it failed to even reach 99.50 cents yesterday, euro-long holders turned a bit nervous and unwound their positions," a Japanese city bank dealer said.
"The market realised that recent euro-buying was overdone and was now consolidating, but there is no change in the basic trend that the dollar is still bearish," he added.
The dollar was also firm against the Swiss franc, sterling and the Australian dollar, which all took a beating from profit-taking after hitting highs last week.
The Swiss franc eased to 1.4920/30 franc per dollar from 1.4814 in late US trade. The Australian dollar fell to $0.5606/09 from $0.5624, while sterling edged down to $1.5276/85 from $1.5325.