* Sterling pressured by possibility of Scottish vote
* France election campaign continues to weigh on euro
* Speculators increase dollar bets -IMM data
TOKYO, Feb 27 The dollar recouped some ground
after dipping to a two-week low against the yen in Asian trading
on Monday, but it lacked momentum as investors awaited this
week's speech by U.S. President Donald Trump for clues on tax
Trump will make his first major policy address to Congress
on Tuesday. It is expected to include some details of his
infrastructure spending and tax plans, but some market
participants worry that a lack of fresh direction could
disappoint investors and weigh on the dollar.
Treasury Secretary Steven Mnuchin said in a televised
interview on Sunday that Trump will use the event to preview
some elements of his sweeping plans to cut taxes for the middle
class, simplify the tax system and make American companies more
globally competitive with lower rates and changes to encourage
The dollar added 0.2 percent to 112.20 yen, after
falling as low as 111.920 yen earlier in the session, its lowest
since Feb. 9.
The euro was steady on the day at $1.0562, as
concerns about France's upcoming election continued to weigh on
the single currency.
While current polls show National Front leader Marine Le Pen
losing either to centrist Emmanuel Macron or right-wing Francois
Fillon, investors have not counted her out, and many fear that
she could lead France out of the euro zone.
"The dominant themes now are Trump's tax plan, and the
French elections," said Masafumi Yamamoto, chief forex
strategist at Mizuho Securities.
"I think ahead of Trump's speech, the dollar is likely to
again fall below 112," he said. "What surprises me today is the
weakness of sterling. The Scots want to have another referendum,
so probably that is weighing on sterling."
Sterling skidded 0.4 percent to $1.2425.
The dollar index, which tracks the U.S. unit against a
basket of six major rivals, benefited from sterling's weakness
and edged up 0.1 percent to 101.16.
The Scottish government is increasingly confident it can win
a new independence referendum and is considering calling one
next year as Britain exits the European Union, sources close to
the Edinburgh administration say.
"Some people might say that the Scottish developments might
lead to a stronger yen," which typically benefits from
investors' risk aversion, said Masashi Murata, senior currency
strategist at Brown Brothers Harriman in Tokyo.
"But I don't think so, because with the stronger global
economy, not so many people would like to sell the dollar, and
also the French presidential election is not a reason to buy the
yen, either," he said. "My sense is that the dollar is stable
Lower U.S. Treasury yields have weighed on the greenback in
The yield on the benchmark U.S. 10-year note dropped to
five-week lows last week. It stood at 2.331 percent
on Monday, compared with Friday's U.S. close of 2.317 percent.
Putting pressure on U.S. yields, economic data on Friday
showed new home sales grew less than expected in January.
Consumer sentiment weakened, though it remained at a level
consistent with a healthy pace of consumer spending.
But speculators have not counted the dollar out. They
increased bullish bets on the U.S. dollar for the first time in
seven weeks, according to Commodity Futures Trading Commission
data released on Friday and calculations by Reuters.
The value of the dollar's net long position totalled $15.02
billion in the week ended Feb. 21, up from $14.99 billion the
The CFTC data also showed net shorts of 50,162 Japanese yen
contracts, the lowest in more than two months.
(Reporting by Tokyo markets team; Editing by Sam Holmes and Kim