LONDON, Feb 6: The yen eased against the dollar on Tuesday as the Japanese unit continued to dominate the foreign exchange market's attention before a keenly-awaited meeting of world finance chiefs.

The euro firmed to 1.2944 dollars in early European trading from 1.2927 dollars late in New York on Monday.The dollar stood at 120.44 yen from 120.35 yen on Monday.

The yen had climbed against the dollar and euro in earlier Asian trade as speculators bought back the Japanese currency ahead of a meeting of finance ministers from the Group of Seven (G7) wealthy nations in Germany.

At the meeting, which starts on Friday, European policymakers are expected to voice concern about the weak yen.

Dealers noted that the influence of hedge funds on financial markets is on the agenda for the G7 meeting so ministers may look at ways to try to discourage the practice of borrowing money in low interest rate countries, such as Japan, to invest elsewhere, the so-called "carry trade."

The European single currency, meanwhile, edged higher against the US currency, amid publication of weaker-than-expected euro zone retail sales data.

The euro was changing hands at 1.2944 dollars against 1.2927 dollars on Monday, 155.88 yen (155.57), 0.6587 pounds (0.6595) and 1.6130 Swiss francs (1.6141).

The dollar stood at 120.44 yen (120.35) and 1.2459 Swiss francs (1.2485).

The pound was being traded at 1.9652 dollars (1.9600).—AFP