TOKYO?The dollar rose against the yen in Asian trade on Tuesday, supported by mounting expectations that the US central bank will be quicker than its Japanese counterpart to raise interest rates, dealers said.

The dollar climbed to 91.35 yen in Tokyo afternoon trade from 91.15 in New York late Monday. The euro gained to $1.4288 from $1.4281 and to 130.55 yen from 130.17.

The dollar benefited from growing speculation that the Federal Reserve will raise interest rates next year earlier than predicted, dealers said. Investors generally prefer currencies offering the prospect of higher yields.

In contrast, Japan's central bank has raised expectations that it will keep its key lending rate at the current level of 0.1 percent for some time yet, declaring last week that it "does not tolerate" deflation.

But some analysts were skeptical about whether the dollar's rally would continue for much longer.

"We expect the dollar?s recovery to stall any time now and anticipate another bout of weakness in the first quarter" of 2010, Dariusz Kowalczyk, chief investment strategist at SJS Markets in Hong Kong, wrote in a note.

Investors were keeping an eye on final estimates of US and British gross domestic product (GDP) for the third quarter due out later in the day.

The pound got a boost from growing anticipation that the British economy will finally pull out of its recession by the end of the year.

Britain's biggest employers' organization, the Confederation of British Industry (CBI), predicted Monday that the British economy would grow by 0.5 percent in the final quarter of 2009, after six quarters of recession.

Britain is the only major world power still mired in recession, and the CBI forecast growth of 1.2 percent next year and 2.5 percent in 2011. The pound climbed to 1.6058 dollars from 1.6050.

Against Asian currencies, the dollar gained to 1.4060 Singapore dollars from 1.4034 on Monday, and to 33.26 Thai baht from 33.23, while holding steady at 32.37 Taiwan dollars.
At the same time it fell to 1,179.60 South Korean won from 1,181.75, to 9,505 Indonesian rupiah from 9,510 and to P46.61 from P46.65.