TOKYO : The dollar extended its gains against the yen in Asian trade on Wednesday after Federal Reserve chairman Ben Bernanke said a weaker greenback was adding to US inflation pressures, dealers said.

They said the market had taken the rare remarks by the Fed chief on currencies as a signal that the US central bank will not be in a hurry to cut interest rates again as such a move would be likely to weigh on the dollar.

The dollar firmed to 105.21 yen in Tokyo afternoon trade from 105.08 in New York late Tuesday.

The euro was little changed at 1.5443 dollars but edged up to 162.40 yen from 162.36.

Bernanke told a conference in Barcelona, Spain that downward pressures on the dollar "have contributed to the unwelcome rise in import prices and consumer price inflation."

He said the Fed was "attentive to the implications of changes in the value of the dollar for inflation and inflation expectations."

"Comments on currencies from the Fed chairman are a very rare thing and surely had a supportive effect on the dollar," Tsutomu Soma, a senior trader at Okasan Securities, told Dow Jones Newswires.

"But now, positive economic indicators will have to back up the dollar or the impact will be wiped out soon," he added.

Yosuke Hosokawa, chief forex strategist at Chuo Mitsui Trust Bank, also said that it was unclear how long support from the comments would last because his remarks were fairly general.

"The US is not the only country that does not wish for a weak currency because it imports inflation," he added. A stronger currency puts pressure on the prices of imported goods.

The Fed next meets on June 24-25 when it is expected to keep rates on hold, having slashed borrowing costs to 2.00 percent from 5.25 percent in late 2007.

Bernanke's remarks make another interest rate cut by the Fed unlikely "unless the economy falls over a cliff, which isn't the Fed's forecast," NAB Capital strategists wrote in a note to clients.

The European Central Bank and the Bank of England meet on Thursday when they are also expected to leave interest rates unchanged.

Traders were also waiting for the release later Wednesday in the United States of a private sector payrolls report for May, followed by the closely watched official monthly labour market report due on Friday.

Against regional Asian currencies, the dollar firmed to 1.3643 Singapore dollars from 1.3630, to 1,017.60 South Korean won from 1,015.22 and to 43.86 Philippine pesos from 43.66.

It slipped to 9,312.50 Indonesian rupiah from 9,318 but was stable at 32.66 Thai baht and at 30.33 Taiwan dollars.

- AFP /ls