TOKYO, Japan -- The dollar was mixed in Asian trade Tuesday as traders took to the sidelines ahead of a US Federal Reserve meeting, waiting for any hints of future interest rate rises, dealers said.

The dollar slipped to 108.20 yen in Tokyo morning trade from 108.25 in New York late Monday. The euro edged down to $1.5547 from $1.5580 and to 168.21 yen from 168.65.

With the Fed widely expected to leave its benchmark rate at 2.0 percent later Tuesday, dealers were expected to focus on the accompanying statement by the US central bank for clues on the policy outlook.

"The focus of the market is on prospects of a future rate hike," said Kanako Oikawa, senior currency strategist at Traders Securities, adding that recent US data suggests inflation is rising too fast for the Fed's comfort.

"If there's any word suggesting a rate hike in the Fed's statement, the dollar will rise," she said.

The Fed worries that if it keeps rates low then inflation could keep rising, but if it acts too soon economic growth could suffer, dealers said.

The greenback has fallen heavily against the euro over the past year because investors tend to prefer currencies offering higher yields.

The European Central Bank is expected to keep official borrowing costs at 4.25 percent Thursday amid concerns about record inflation coupled with sluggish economic growth in the euro zone.

Dealers said a decline in oil prices was helping to prop up the dollar, although traders were not actively buying ahead of the Fed decision.

Crude oil prices tumbled below $120 a barrel Monday for the first time in three months as demand concerns climbed and a tropical storm looked set to miss energy installations in the Gulf of Mexico.

Australia's central bank was also meeting Tuesday with markets watching for any signs a rate cut could be on the cards to shore up the domestic economy.