TOKYO, Oct 16: The dollar rallied against the yen late Tuesday on a news report of a possible halt to US bombing in Afghanitan and in reaction to a rebound in the euro against the Japanese unit, dealers said.

The greenback traded at 121.17-20 yen bouncing back from an intraday low of 120.66 yen, compared with 120.82 yen in New York and 120.96-99 in Tokyo late Monday.

Market players bought back the dollar on a report about a possible improvement in the Afghan situation, said Sanwa Bank dealer Yishihiro Imakawa. But there was no solid news to support dollar-buying.

Daiwa Bank dealer Susumu Tsuda said: There was no particular incentive to buy the dollar. But dollar-buying was stimulated by euro-yen bids when the market was locked in a stalemate.

The euro fetched 109.83 yen up from 109.64 yen at noon. It also compared with 109.91 yen in New York and 110.05 yen in Tokyo late Monday.

Dealers said dollar-selling was weak in general amid fears Japan’s finance ministry might order the Bank of Japan (BoJ) to step into the market once more to cap recent gains in the yen.

The ministry has intervened repeatedly to sell the yen in the weeks following the September 11 terror attacks in New York and Washington.

The euro bought $0.9060-63 compared with $0.9086 in New York and $0.9104-07 in Tokyo late Monday.

In late Singapore trading, the dollar firmed to 1,300.90 South Korean won from 1,296.90 on Monday and 34.5565 Taiwan dollars from 34.5450.

The greenback slipped to 51.7275 Philippine pesos from 51.7875, 1.8117 Singapore dollars from 1.8187 and 44.595 Thai baht from 44.63.

It steadied at 10,000 Indonesian rupiah.—AFP