Dollar up in Asia ahead of Fed stimulus decision

TOKYO, Jan 29 (AFP): The dollar rose in Asia Wednesday as investors focus on the outcome of a two-day Federal Reserve policy meeting with many tipping a further reduction in the bank's stimulus drive.

In afternoon Tokyo trade, the dollar fetched 103.25 yen, up from 102.97 yen in New York Tuesday afternoon.

The euro also rose to 140.98 yen from 140.73 yen in US trade while it weakened to $1.3654 against $1.3667.

A pullback on the Fed's monetary easing is a plus for the dollar but could exacerbate fears of a capital flight away from emerging markets as dealers look for safer investments.

Global equity and forex markets have been in turmoil since the end of last week after a plunge in the Argentine peso sparked fresh worries about developing nations' economies.

The sell-off in Buenos Aires came on the back of data indicating manufacturing activity in China-a key driver of global growth-had contracted in January.

But on Wednesday traders were soothed Turkey's decision the day before to aggressively raise interest rates to defend the lira. India's central bank also hiked interest rates hours earlier.