The dollar slipped against the yen and euro Thursday in Asian trading as confidence in the yen got a big boost from a rally on the Tokyo stock market, where the benchmark finished at a four-year high. The dollar was trading at 110.30 yen in Tokyo midafternoon, down 0.80 yen from late Wednesday and below the 110.67 yen it bought in New York later that day. The euro rose to $1.2395 from $1.2381 late Wednesday. The Nikkei 225 posted strong gains Thursday on the view that Japan's ruling Liberal Democratic Party will likely win in the Sept. 11 election, avoiding political turmoil, dealers said. The index gained 1.4 percent to finish at 12,263.32 points, its higest finish since Aug. 7, 2001. "Contrary to expectations this morning that Japanese stock prices would stay put or fall today after yesterday's big rise, they continued to gain, boosting the bullish sentiment for the yen," said Minoru Shioiri, senior manager of foreign exchange at Mitsubishi Securities. But some players say the yen-buying indicates short-term investment. Kimihiko Tomita, vice president of the Global Currency and Commodity Group at JPMorgan Chase bank, said speculators had pushed the yen lower ahead of Monday's vote on Koizumi's reform bill package in the upper house of Parliament and were now cashing in on their moves. "I don't think the yen's rise is going to continue much longer," he said. The Nikkei's gains totaling nearly 500 points this week have erased any initial worries that any political turmoil will undermine the nation's economy. Japanese Prime Minister Junichiro Koizumi on Monday called elections after parliament defeated a bill to privatize the nation's sprawling postal system and its savings deposit, calling on the people to decide whether his proposed reforms should go through. Japanese newspaper polls show Koizumi's ratings are up, and that has helped send the stock market higher. And analysts say even if the Democrats, the biggest opposition, win the election, most of the legislators in that party also want reforms.