* Market expects RBA to cut a quarter point to 3 pct
* Euro down from 7-mth high vs yen overnight
By Lisa Twaronite
TOKYO, Dec 4 The dollar slipped against the yen
on Tuesday after U.S. manufacturing activity hit a three-year
low in November, while the euro succumbed to profit-taking after
hitting highs against both the dollar and the yen the previous
The Aussie was steady ahead of a Reserve Bank of Australia
(RBA) policy decision at 0330 GMT. A Reuters poll of 23 analysts
on Friday found 16 expected a cut.
Data released on Monday showed U.S. manufacturing activity
surprisingly contracted in November, dropping to its lowest
level in more than three years.
"The perceived strengthening of the U.S. economy was one
factor pushing up the dollar in recent weeks," said Masashi
Murata, senior forex strategist at Brown Brothers Harriman.
"Ahead of Friday's U.S. nonfarm payrolls report, which could
show that job growth is slowing, the dollar is easy to sell," he
Continuing concerns about the U.S. "fiscal cliff" also added
to the perceived safe-haven appeal of the yen.
The White House dismissed a proposal from congressional
Republicans on Monday to avert the $600 billion worth of tax
increases and spending cuts, saying it did not meet President
Barack Obama's pledge to raise taxes on the wealthiest
The dollar shed about 0.1 percent to trade at 82.13 yen
after earlier dropping as low as 82.04 yen, moving
further away from last month's high of 82.84 yen.
The yen's rise against the dollar also bolstered it against
the euro, with some investors locking in gains after the
European unit rise on Monday on positive news on Europe's debt
Spain formally requested European funds to recapitalize its
banking sector, pushing down Spanish and Italian bond yields as
investors became more confident about buying euro zone debt.
Greek bonds rallied after the announcement of details of a debt
Against the yen, the euro slipped about 0.2
percent to 107.15 yen, after rising to a seven-month high of
107.67 yen on Monday.
The euro last stood at $1.3052, steady from late U.S.
levels on Monday, when it rose as high as $1.3076, its highest
level since Oct. 22.
Against the U.S. dollar, the Aussie rose 0.1
percent to $1.0428, still well shy of last week's two-month high
If the RBA trims its cash rate by a quarter point to 3
percent as expected, that will match the record lows touched
during the global financial crisis in early 2009.