* Dollar/yen falters after touching 29-month high
* Yen regains some ground after previous day's sell-off
* Euro/yen pulls away from previous day's 18-month high
SINGAPORE, Jan 3 The yen bounced after hitting a
29-month low versus the dollar on Thursday, having come under
pressure earlier after U.S. lawmakers forged a deal to avoid
huge tax increases and spending cuts, fueling demand for riskier
The dollar fell 0.2 percent to 87.11 yen. The dollar
rose to as high as 87.36 yen earlier on Thursday on trading
platform EBS, the greenback's highest level against the Japanese
currency since late July 2010.
"Technically dollar/yen looks somewhat overbought here. It's
gone a long way in a very short time," said Callum Henderson,
global head of FX research for Standard Chartered Bank in
Singapore, adding that the dollar could see some consolidation
in the near term before heading higher.
"Over the next few months, I think the bias is still for a
higher dollar/yen rate," he added.
The yen also edged higher on the crosses. The euro fell 0.4
percent to 114.72 yen, pulling away from an 18-month
high of 115.995 yen set on trading platform EBS on Wednesday.
Against the dollar, the euro slipped 0.1 percent to $1.3169
, inching away from the previous day's high of $1.3300.
The yen had tumbled on Wednesday after U.S. lawmakers passed
a bill on Tuesday to avoid the "fiscal cliff", bolstering
investors' appetite for risky assets.
The yen has also taken a hit from expectations that a new
Japanese government led by Prime Minister Shinzo Abe would push
the Bank of Japan into more forceful monetary easing to beat