The dollar edged higher against the yen and the euro in Asia Wednesday as U.S. hedge funds engaged in bargain-hunting, but dealers said the greenback's broad weakening trend is still intact. Japanese importers also bought dollars so that they could purchase natural resources, such as oil, cheaply overseas, pushing the U.S unit to a high of Y89.07 early in Asian trading, dealers said. But the dollar later lost most of its gains and was trading at Y88.80 as of 0450 GMT compared with Y88.76 in New York late Tuesday. The euro stood at $1.4705, down from $1.4724. "Players who had sold the dollar aggressively versus the yen and the euro yesterday were buying it back. These levels were a bargain for them," said Hiroshi Maeba, a senior trader at Nomura Securities. But traders said such buying won't last long and the dollar may resume falling, noting that the currency could decline toward Y87 in the short-term. Against the dollar, the euro may rise to $1.48, they said. "The dollar's weakening trend has not changed," Maeba said. While the Reserve Bank of Australia raised its policy rate Tuesday, the situation is different for the U.S., he added. "The Federal Reserve is not expected to hike rates any time soon" as it may take a while before U.S. growth is back on track, he noted. The RBA raised its target cash rate 25 basis points to 3.25%, which is the first rate hike among the Group of Seven leading nations after the global financial turmoil. Japanese exporters want to sell the dollar above the Y90-mark, which also is helping make the U.S. unit top-heavy, dealers said. Meanwhile, the euro was almost flat versus the yen due to a lack of trading factors during the Asian trading hours, changing hands at Y130.59 compared with Y130.66.

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