LONDON, Oct 21: The dollar backtracked from a four-month high against the yen and a one-month peak against the euro on Monday as US stock futures tempered hopes of further Wall Street gains.

A surprise decision by ratings agency Moody’s Investors Service to raise Japan’s foreign currency debt ceiling to its top notch gave the yen additional upward momentum.

The dollar has rallied in recent weeks as a dramatic recovery in US stocks has brightened the appeal of US assets, easing fears over the United States’ ability to fund its current account deficit. But US stock futures were pointing to a weaker open on Monday with investors keen to cash in recent gains.

The dollar got support from a strong rally in equities last week but it is difficult seeing this being sustained, said Michael Klawitter, senior currency strategist at WestLB.

TOKYO: The dollar fell against the yen on Monday after Moody’s upgraded Japan’s foreign currency country ceiling by one notch, dealers said.

The greenback traded at 124.87-90 at 5:00 pm (0800 GMT) down from 125.48-52 yen in New York and 125.30-33 yen in Tokyo late Friday.

Moody’s announcement also buoyed the Japanese currency against the euro.

The euro was quoted at 121.50 yen at around 5:00 pm, against 1.89 yen in New York and 121.71 yen in Tokyo Friday afternoon.

Meanwhile, the euro bought $0.9730-35, against $0.9718-22 in New York and $0.9707-10 in Tokyo late Friday.

The euro is strengthening somewhat, but I think it will still remain in the current range, Noumi said.

European Commission head Romano Prodi last week labelled as “stupid” the euro zone’s stability pact which underpins Europe’s single currency by setting budget targets for member states.

In late Singapore trade, the dollar was weaker at 34.9065 Taiwan dollars from 34.9229 on Friday, 53.22 Philippine pesos from 53.30, 43.705 Thai baht from 43.805, 1.7820 Singapore dollars from 1.7892, 1,243.35 South Korean won from 1,246, and 9,199.5 Indonesian rupiah from 9,205. —Reuters/AFP