Dollar lower vs yen in Asian trading amid subprime mortgage turmoil

TOKYO (AP) - The dollar fell versus the yen in Asian trading Tuesday amid lingering concerns about U.S. subprime mortgages.

The dollar was trading at 117.91 yen midafternoon Tuesday, down from 118.36 yen late Monday in New York. The euro rose to US$1.3622 from US$1.3619.

The dollar will stay weak against the yen, especially if U.S. economic indicators slated for release this week hint at a slowdown, some dealers said.

"Many players are holding onto the main scenario - that is, the dollar could break below 117 yen and trek toward 115 yen," weighed down by subprime concerns, said Motonari Ogawa, senior trader at Morgan Stanley.

"If U.S. data turns out to be weak, that would strengthen speculation for U.S. interest rate cuts, and the yen would be bought," Ogawa said.

After days of unwinding of yen-carry trades - which are essentially bets on the yen's weakness - some traders, though, are beginning to wonder whether the currency has the strength to climb much further.

"Given that position adjustments have made good progress overall, the yen probably doesn't have enough power left to hit 116 yen" per U.S. dollar, said Seiichiro Muta, foreign-exchange director at UBS AG.

Against other Asian currencies, the dollar was mostly higher. It rose 0.70 percent against the Indian rupee to 40.687 and 0.33 percent against the South Korean won to 932.2.