The US dollar was firmer in late afternoon trade here, holding above the key psychological mark of 110 to the yen, as players waited for the start of the two-day US Federal Open Market Committee meeting, dealers said. The market widely expects the fed funds rate to be raised Thursday by 25 basis points to 3.25 pct, further lifting sentiment in the greenback against major counterparts like the yen and the euro. The wildcard would be the FOMC's accompanying statement, analysts said. "Of greater interest is the FOMC statement where markets are closely looking for any signals of an imminent pause in Fed tightening," strategists at Singapore's United Overseas Bank wrote. In Japan industrial output fell a seasonally-adjusted 2.3 pct in May from the previous month. Year-on-year, output increased 0.9%. Meanwhile light sweet crude oil futures for August delivery settled at 58.20 usd a barrel on the NYMEX yesterday well below Monday's record high settlement of 60.54 usd. The contract traded at 58.26 usd in the afternoon session here. Although the easing of oil prices from recent highs last night has helped Asian currencies to regain some ground against the dollar, the recovery has been generally mild. Dollar-yen slipped under 109.80 in early trade on selling reportedly from two Australian banks, and subsequently touched a low of 109.72 caused by selling apparently linked to yen repatriation activity and option trading. The pullback though turned out to be temporary when buying of the dollar by US investment banks appeared and triggered a sharp U-turn in the pair. It pushed through last night's 110.09 yen high but only slightly, marking a high of 110.10 before the momentum faded on rumored selling by option desks defending barrier options there and at 110.50. After topping out at 110.17 in the afternoon, the dollar-yen eased back slightly but retained its firm foothold above 110 as European markets began to stir. Risks remain to the upside, dealers say with more stops lurking in the 110.20-25 region and option barriers at 110.50/60. The Euro-dollar saw a relatively mild session this morning in Asia, with the rate initially deflating from 1.2080 usd to 1.2052 on selling by funds before a mild bounce took it back up to 1.2060. Bids near New York's 1.2051 usd low, reportedly from a European name, supported the move up but the pair is still at risk of another move toward the 1.2000 mark given the FOMC is widely expected to hike its rates again. The pair continued to trade around 1.2060 usd through much of the afternoon until pre-open European selling apperaed and sent the euro sliding to 1.2044 usd. "We would continue to play the range for now, but sell on rallies to 1.2100-20 usd with a stop above 1.2150 usd and look to take profit around 1.1960 usd," UBS said.