* North Korea's missile test underpins safe-haven yen
* Yellen's remarks cement rate-hike expectations
* Speculators trim dollar-long positions -IMM data
TOKYO, March 6 The dollar slipped in Asian
trading on Monday, as investors locked in gains after its rise
last week on growing expectations of a U.S. interest rate hike
later this month.
Market participants also kept a wary eye on developments in
North Korea, which fired four ballistic missiles early on
Monday, three of which landed in Japan's exclusive economic
The news bolstered the perceived safe-haven yen, and also
weighed on U.S. Treasury yields, decreasing the dollar's appeal.
"North Korea is unpredictable, but it fairly frequently
conducts missile tests," said Kaneo Ogino, director at foreign
exchange research firm Global-info Co in Tokyo.
"One difference now is that it is also hard to predict how
President (Donald) Trump will respond to such tests," he said.
The dollar slipped 0.2 percent to 113.88 yen, down
from Friday's high of 114.75.
The yield on benchmark 10-year U.S. Treasury notes
slipped to 2.476 percent in Asian trading, from
Friday's U.S. close of 2.492 percent.
Federal Reserve Chair Janet Yellen said on Friday that the
central bank is set to raise its benchmark interest rate later
this month as long as economic data on jobs and inflation holds
up, in comments that likely cement a rate hike at the Fed's next
meeting on March 14-15.
In addition to Yellen, four other top U.S. central bank
officials spoke at various times during the day.
Fed funds futures prices show traders see more than an 85
percent chance of a rate increase this month, up from just a one
in three chance early last week, according to CME Group's Fed
Still, speculators reduced bullish bets on the U.S. dollar
in the week ended Feb. 28, pushing net longs to their lowest
since early October, according to Commodity Futures Trading
Commission data released on Friday and calculations by Reuters.
"There has been some dollar adjustment back down today,
after it rose throughout last week on the heightened
expectations for a Fed rate increase," said Kumiko Ishikawa, FX
market analyst at Sony Financial Holdings.
U.S. political developments also weighed on the dollar.
Trump on Saturday accused his predecessor Barack Obama of
wiretapping him during the 2016 election campaign, an accusation
rejected by Obama and a top former intelligence official.
The controversy distracts from policy issues on which
investors are still waiting for details, said Masashi Murata,
senior currency strategist at Brown Brothers Harriman.
"We need to take time until we can get more details about
fiscal stimulus under Trump," since the U.S. economy is unlikely
to continue its pace of growth without stimulus, Murata said.
The euro slipped 0.2 percent to $1.0601, as investors
monitored developments in France's election campaign.
Scandal-hit French presidential candidate Francois Fillon
said on Sunday he was staying in the race but left the door open
to talks with senior members of his party who are increasingly
anxious about his candidacy.
Fillon's fellow conservative Alain Juppe would reach the
second round should he replace him, an opinion poll said on
Against a basket of currencies, the dollar index fell 0.1
percent to 101.47.
The Australian dollar slipped 0.3 percent to
$0.7573 after it skidded nearly 1 percent last week as the
greenback climbed on the Fed hike expectations.
In contrast with the Fed, the Reserve Bank of Australia is
widely expected to maintain its current record-low cash rate of
1.5 percent at its policy meeting on Tuesday.
(Reporting by Tokyo markets team; Editing by Richard Pullin &