Dollar edges up in Asian trade

The dollar edged up in Asian trade on Thursday amid caution after a Wall Street slump and ahead of the Bank of England's interest rate decision, dealers said.

The dollar rose to 106.76 yen in Tokyo from 106.72 in New York late Wednesday.

The euro slipped to 1.5726 dollars from 1.5754 and to 167.89 yen from 168.04. The British pound slipped to 1.9814 dollars from 1.9826.

"Currencies are directionless while markets are paying close attention to stock markets," said Saburo Matsumoto, chief forex strategist at Sumitomo Trust Bank.

The yen was higher in earlier trade following an overnight plunge on Wall Street, but the Japanese currency stabilised by noon trade as Japanese shares edged back up, he added.

The blue-chip Dow Jones Industrial Average slumped a hefty 236.77 points (2.08 percent) to close at 11,147.44, entering into "bear market" territory as investors fretted over the health of corporate America.

An unnamed trader in a major Tokyo bank told Dow Jones Newswires that "market conditions are a little unstable and players are reluctant to push the dollar much higher."

But "looking at yesterday's moves, the dollar could have fallen further given all the negative news and the stock market's fall, but it didn't. So it seems players are not that nervous at the moment," he added.

An interest rate decision is due later Thursday by the Bank of England (BoE). British borrowing costs are expected to stay unchanged at 5.0 percent amid economic turmoil, dealers said.

"The BoE faces a tough task in balancing the evident sharp slowing in activity against a background of high and rising headline consumer price inflation," wrote NAB Capital strategist John Kyriakopoulos in a note.

"We expect them to leave interest rates on hold in July, as they seek to ensure that higher short-term inflation does not get embedded into longer-term underlying inflationary pressures," he added.