* Hawkish comments from Fed officials underpin greenback
* Euro edges up, but pressured by French election fears
* Sterling gains on euro, dollar
TOKYO, Feb 22 The dollar lost ground in Asian
trading on Wednesday as investors awaited the minutes of the
Federal Reserve's latest meeting for clues as to the pace of
interest rate hikes, while Europe's political woes kept a
bruised euro under pressure.
The Fed minutes due to be released later on Wednesday could
either reinforce or undermine recent hawkish comments from
central bank policy makers.
Cleveland Fed President Loretta Mester said late on Monday
in a speech in Singapore that she would be comfortable raising
rates at this point if the economy maintained its current
Philadelphia Fed President Patrick Harker also told
reporters on Monday that he would support an interest rate
increase at a mid-March policy meeting as long as inflation,
output and other data until then continue to show the U.S.
economy is growing.
The dollar was 0.2 percent lower at 113.45 yen,
edging away from its peak of 114.955 yen touched a week ago,
which was its highest since late January.
"The dollar was pushed up by the Fed talk, but its upside is
heavy in the Asian session, due to factors including Japanese
companies' seasonal repatriation," said Mitsuo Imaizumi, chief
currency strategist at Daiwa Securities in Tokyo.
"We're all waiting for the minutes, to see if members talked
about reducing the Fed's balance sheet," he said.
Money market futures continued to price in
approximately a one-in-five chance of a rate hike at the Fed's
next meeting in March.
The dollar index, which tracks the greenback against
a basket of six major currencies, was last down slightly at
101.33 after hitting a six-day high of 101.600 overnight.
Bank of Japan Governor Haruhiko Kuroda said the chance of
the central bank lowering interest rates deeper into negative
territory was low for now, backing market expectations that no
additional monetary easing would be forthcoming in the near
Japanese Finance Minister Taro Aso said that Japan was not
thinking now of issuing negative rate Japanese government bonds.
The euro was up 0.1 percent at $1.0545 after slipping
to a low of $1.0526 overnight. A break of the Feb. 15 low of
$1.05215 would put it in its deepest trough since Jan. 11.
The euro remained pressured by market concerns about the
anti-European Union rhetoric from French presidential candidate
Marine Le Pen ahead of the first round of French elections on
An Elabe poll showed the lead of centrist Emmanuel Macron
and conservative rival Francois Fillon over Le Pen falling to 18
and 12 points respectively, suggesting Le Pen may have more
chance of springing a surprise if she can make it through to the
second round of the elections in May.
Sterling got a lift from the euro's woes, rising 0.3 percent
against the dollar to $1.2504. The euro gave up 0.2
percent against the pound to 84.34 pence, after
earlier falling as low 84.29, its lowest since Dec. 22.
"There's some sterling shortcovering, fuelled by
euro/sterling falling to a two-month low," said Sue Trinh, head
of Asia FX strategy at Royal Bank of Canada in Hong Kong.
"We've got fourth-quarter GDP out later, which will be the
key focus there, particularly as any upward revision is likely
to propel euro/sterling further downward," she said, referring
to the second estimate of UK gross domestic product.
But underpinning the single currency, purchasing manager
index (PMI) reports showed the euro zone economy expanded much
faster and more smoothly than expected.
Eurozone private sector and manufacturing growth
unexpectedly accelerated to near a six-year high in February and
job creation reached its fastest since August 2007.
(Reporting by Tokyo markets team; Editing by Simon