The dollar regained lost ground against the yen and euro in Asia Friday after U.S. Federal Reserve Chairman Ben Bernanke said the Fed is ready to "tighten monetary policy" once a recovery takes hold, prompting Asian hedge funds to buy the greenback. But broad dollar-bearishness may continue, traders said, adding that the U.S currency may fall back to Y87.00 in the near term, while the euro could rise to $1.4850. In a speech in Washington during the Asian morning, Bernanke said that "we will need to tighten monetary policy" when an economic recovery takes hold, while also acknowledging that the Fed continues to believe that a loose monetary policy will be needed for an extended period. The comments prompted Asian hedge funds and speculators to buy the dollar, as the remarks reversed some of the recent pessimism on the U.S. economic outlook, dealers said. "Players are using the comment from Chairman Bernanke as a cue to buy the dollar," said Keiichi Iguchi, a dealer at Resona Bank. "Recent declines in the dollar also caused players to bargain-hunt," he added. The dollar climbed to an intraday high of Y89.32, compared with Y88.42 late Thursday in New York. Against the U.S. unit, the euro declined to a low of $1.4704 from $1.4790. The Dollar Index, a gauge of the currency's value against six major units including the euro, rose to 76.24 as of 0450 GMT from 75.96 in New York late Thursday. However, traders said the U.S. unit may resume falling as the Fed is likely to keep its interest rates low over at least the next 12 months. "The impact of Bernanke's remark is likely to be short-lived as a dollar-bearish mood is unchanged," said Yuzo Sakai, a foreign-exchange manager at Tokyo Forex and Ueda Harlow. "Many players believe the U.S. rate hike won't been executed until at least late next year." Meanwhile, the euro also climbed versus the yen as Japanese importers bought the euro for a regular settlement. The unit stood at a session high of Y131.49 compared with Y130.75 in New York Thursday.

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