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Dlr in range vs yen,euro as FOMC,Ifo awaited

TOKYO: The dollar traded in relatively tight ranges versus other major currencies in Tokyo on Tuesday, as operators were wary ahead of the US Federal Reserve's policy-setting meeting later in the day.

The Federal Open Market Committee (FOMC) is widely expected to raise its target for the key federal funds rate by a quarter percentage point to 6.0 percent from 5.75 percent.

The market also awaited the release of Germany's closely watched Ifo business climate index for February for clues to the European Central Bank's monetary policy.

The dollar was quoted at 106.47/50 yen, compared with 106.40 yen in late on Monday in New York. Japanese markets were closed on Monday for a national holiday.

The euro was quoted at $0.9725/30, steady from $0.9730 in New York late on Monday.

Lingering worries over tensions between Taiwan and China after Saturday's presidential elections on the island provided the dollar with some support versus the Japanese currency in early trade.

"Taiwan is still a factor making people cautious about buying the yen. But worries seem to have receded quite a bit after today's Taiwan stock market rally," said a dealer at a Japanese trust bank.

Taiwan's key stock index TAIEX closed up 468.43 points or 5.49 percent at 9,004.48 on Tuesday, amid optimism that China-Taiwan tensions would not escalate.

Such optimism emerged after Chen Shui-bian, Taiwan's president-elect, called on Monday for a peace summit with Beijing to "ease tensions and antagonisms".

Taiwan's Defence Ministry said on Tuesday the Chinese armed forces are holding routine training missions, but are not conducting large-scale training exercises. -Reuters