TOKYO (AFX-ASIA) - The dollar was rangebound against the yen in midafternoon trade, with investors waiting for the outcome of US Secretary of State Colin Powell's peace mission in the Middle East, dealers said. Bank of Yokohama foreign exchange assistant manager Hiroshi Ishihara, however, said the market is gradually beginning to shift its attention away from Middle East-related factors to market fundamentals, as crude oil prices have now stabilised. "People are beginning to re-consider if the yen is really a buy, based on fundamental analysis, after having apparently oversold the dollar on the Middle East leads," he said. "We often see such political lead-driven play when there are no major economic news." Investors also remained less encouraged to re-test the downside of the dollar after Finance Minister Masajuro Shiokawa said yesterday he did not believe the dollar can go below the 130 yen level, dealers said. Speculation about possible monetary action by the Swiss National Bank to prevent sharp appreciation of the Swiss franc also supported the downside of the dollar against the yen, they said. "The recent round of safe-haven flow is likely to come down due to concerns over possible action by the authorities, including Japan," Ishihara said. "The dollar/yen is most likely to return to the 130-135 yen range..." Caution ahead of the official announcement tomorrow of the special inspection on banks by the Financial Service Agency also limited the price movement of the dollar/yen, although concerns over the so-called "event risk" have receded substantially, dealers said. The euro was confined to rangebound deals due to a lack of follow-through buying, after having failed to extend its gains on reduced concerns over a further rise in crude oil prices, dealers said. "From a longer technical viewpoint, whether the euro can break the 0.8960 usd level is the key, as the breach of such level means the real end of the prolonged downtrend," Ishihara said.