Forex@all

Dealers said the greenback may rise further against the Japanese unit if U.S. government bond yields strengthen, making the securities more attractive for global investors. Currency market participants will therefore monitor how yields respond to upcoming U.S. auctions this week.

"The currency market in the morning was dominated by (dollar-buying) flows from Japanese importers, causing short-term players to follow suit," said Hideaki Inoue, a senior trader at Mitsubishi UFJ Trust and Banking Corp. "The focus now is on whether the dollar can top the key Y95-level and form a rising trend."

As of 0450 GMT, the dollar stood at Y94.17 compared with its New York overnight level of Y93.71. The European single unit changed hands at Y126.05 from Y125.63.

Dealers said the dollar may rise toward Y95.00 if forthcoming U.S. Treasury auctions come in weak, buoying yields. In particular, market participants are focused on the $21 billion 10-year bond auction later in the global day and $13 billion 30-year tender on Thursday.

But the dollar's further gain could be capped in the near-term by Japanese exporters' sell-orders above Y95, dealers said.

Meanwhile, the euro was worth less in dollar terms at $1.3383 from $1.3406 in New York late Tuesday. Prospects for the single currency appear gloomy due to lingering concern over Greece's sovereign debt. News suggesting that the nation's debt problem cannot be solved easily may push the single unit down toward Y125.00 and $1.3200, dealers said.

Later today, market participants will be watching for any comments from Bank of Japan Gov. Masaaki Shirakawa about the possibility of further easing at a press conference at 0630 GMT. The BOJ left its overnight call interest rate unchanged at 0.1% at its two-day policy-setting meeting which ended earlier in the day. The widely expected had no clear impact on the currency market.

The ICE U.S. Dollar Index, which tracks the greenback against a trade-weighted basket of currencies, was at 81.451 from 81.330 in New York overnight.