TOKYO - The euro held steady against the dollar in Asian trade on Tuesday amid expectations that the United States will maintain its monetary easing policy to boost its plodding economy.

The euro eased slightly in Tokyo afternoon trade but was relatively firm at US$1.3350, compared with US$1.3356 late Monday in New York, where the European unit climbed to its highest level since the start of March on dovish comments by Federal Reserve chairman Ben Bernanke.

The dollar was at 82.87 yen, unchanged from New York. The euro traded at 110.62 yen against 110.68 yen in New York.

"The dollar is bearish against the euro after Bernanke's comments," a senior trader at a major Japanese trust bank told Dow Jones Newswires.

In a speech on Monday, Bernanke cautioned that the US labour market remained weak and questioned whether a recent dip in the unemployment rate was sustainable.

He signalled that the Fed was likely to keep its stimulus policies in place.

The euro was also buoyed after Chancellor Angela Merkel suggested that Germany may allow a boost in the eurozone's war chest to contain its debt crisis, ahead of European finance minister talks on the issue.

In an apparent policy shift amid fierce resistance at home, Merkel said Berlin was now open to combining 500 billion euros (S$837 billion) from a permanent rescue fund that comes into effect in July with about 200 billion euros already promised to some of the region's debt-ridden nations.

The United States, the International Monetary Fund and the European Central Bank have been nudging Germany to take a more aggressive approach to the firewall, saying a bigger fund would help convince investors that Europe has a viable strategy for dealing with its public debt woes.

The market was "encouraged" by Merkel's support, National Australia Bank said.

"This has been discussed for months now, with some German hesitation. The support is a positive sign, but the key will be when it is actually approved," the bank said in a note.

European Union finance ministers meet in Copenhagen on Friday to discuss the combined package.

The dollar was mixed against other Asian currencies.

It fell to Sg$1.2576 from Sg$1.2598 on Monday, to 30.70 Thai baht from 30.72 baht, to 1,135.00 South Korean won from 1,138.40 won and to Tw$29.57 from Tw$29.58.

The greenback edged up to 42.94 Philippine pesos from 42.92 pesos while staying flat at 9,190.00 Indonesian rupiah.