TOKYO - The dollar was mixed in Asian trade on Thursday as markets look for signs of a deal in solving a US budgetary impasse, while the yen weakened as speculation mounts over further central bank easing.
The greenback bought 82.10 yen (S$16.10), up from 82.03 yen in New York trade late Wednesday, while the euro gained on the dollar at $1.2953 from $1.2939.
The European single currency traded at 106.36 yen, gaining ground from 106.14 in US trade.
US lawmakers have been working to find a new budget deal with the so-called "fiscal cliff" of spending cuts and tax hikes slated to come into effect on January 1, threatening to drag the US into recession in what would be a major blow to the world economy.
Congress remains bitterly divided over raising taxes and where spending cuts should be made with the issue hanging over global markets.
On Wednesday, House of Representatives speaker John Boehner said he was optimistic of a deal between his Republicans and their bitter Democratic rivals.
Later in the day US President Barack Obama also said he expected a solution would be found before Christmas.
A string of back and forth remarks on the fiscal cliff issue has seen stock and currency markets swing in tandem.
"Expect much, much more of this in coming weeks," National Australia Bank said in a note.
The yen, meanwhile, was affected by continuing remarks by Japan's main opposition leader Shinzo Abe, widely tipped to become prime minister after December elections, who has vowed to pressure the central bank into aggressive monetary easing to boost the world's third-largest economy.
Abe said Thursday that the government and Bank of Japan should strike a deal for a two per cent inflation target, with his easing comments further weighing on Japan's currency.