TOKYO ? The dollar rose against the euro in Asia on Tuesday on rekindled concerns over the health of European banks, dealers said.

The euro fell to $1.2808 in Tokyo morning trade from $1.2883 in London late Monday. The New York market was closed for the Labour Day holiday.

The European single currency fell to 107.76 yen from 108.34 in London. The dollar edged down to 84.15 yen from 84.21 yen.

The euro lost ground on doubts over Europe's "stress tests" on major banks, said Toshihiko Sakai, senior dealer at Mitsubishi UFJ Trust and Banking.

The test results, published in July, showed all but seven European lenders out of 91 banks were strong enough to withstand future financial crises.

But a report in the Wall Street Journal Tuesday said the tests "minimized" their debt risks and "understated some lenders' holdings of potentially risky government debt," citing its own analysis.

"An examination of the banks' disclosures indicates that some banks didn't provide as comprehensive a picture of their government-debt holdings as regulators claimed," it said.

Sakai said it was "natural" that the euro dropped.

"I'm bearish on the euro. Its recent rebounds had been unfounded," he said.

Currency traders were also showing caution ahead of key monetary policy decisions from central banks in Japan on Tuesday, Canada on Wednesday and Britain on Thursday.

The Bank of Japan is widely expected to keep its policy interest-rate target at 0.1 percent and take no further unconventional easing steps as it wraps up a two-day policy meeting on Tuesday.

The central bank announced additional loan schemes last week as it came under heavy pressure from the government to act to safeguard a fragile recovery threatened by a strong yen.