TOKYO, June 16, 2008 (AFP) - The dollar rose against the yen in Asian trade Monday after oil prices declined and Group of Eight finance ministers generally showed support for a stronger greenback, dealers said.

The dollar gained to 108.34 yen in Tokyo morning trade from 108.15 in New York late Friday.

The euro was steady at 1.5388 dollars against 1.5384 while rising to 166.68 yen from 166.38.

With central bank chiefs absent from a weekend meeting of finance ministers from Britain, Canada, France, Germany, Italy, Japan, Russia and the United States, currencies were not mentioned in the joint communique.

But most G8 finance ministers supported Washington's call for a stronger dollar during press conferences at the weekend meeting, said Kenichi Yumoto, vice president of forex sales and trading at Societe Generale.

"There were no openly critical remarks about America's desire for a stronger dollar, that it's unfair or that it opposes market fundamentals," said Yumoto.

The G8 also stressed the economic threat from inflation, saying rising oil and food prices pose "a serious challenge to stable growth worldwide."

"The G8 appeared to sanction a stronger dollar as providing a key role in easing the inflation threat to the world economy," NAB Capital analysts wrote in a note to clients.

The greenback was also propped up by a fall in oil prices after UN Secretary General Ban Ki-moon said he was told by Saudi Arabia that the OPEC powerhouse would increase oil output by 200,000 barrels a day from next month.

Further support came from expectation that interest rates in the United States may rise to deal with inflation, which has overtaken the credit crisis as the number one economic concern of US policymakers, dealers said.

But traders were cautious ahead of earnings reports by US investment banks Goldman Sachs and Morgan Stanley this week as they are expected to disclose large write-downs due to the credit crunch, dealers said.

However, the bank results may have less market impact than at the height of the credit crisis, said Yumoto, noting that traders are waiting for US economic data due this week including housing and inflation related figures.

kdf/dr/mc

Forex-Asia