By MARTIN VAUGHAN SINGAPORE--The euro gained modestly in Asia Monday as investors remained upbeat following last week's announcement by the U.S. Federal Reserve that it would buy more bonds, but the common currency traded well below its Friday peak. The yen also strengthened against the U.S. unit, though trade was thin because Tokyo markets were closed for a holiday. "The euro is probably pausing here for breath, and may backfill a little," said RBS senior currency strategist Greg Gibbs. "But the market still anticipates the Fed expanding its balance sheet over the next several months, and that will continue to weigh on the U.S. dollar." At 0615 GMT the euro was trading at $1.3133 according to EBS via CQG, compared with $1.3127 late Friday in New York. The euro on Friday was as high as $1.3166, a four-month peak. On Monday the dollar slid against the yen, which could renew expectations that Japanese authorities would intervene to slow the strengthening currency. For now investors, who pushed up the dollar on Friday, seemed willing to "front run intervention to save them the bother," said Westpac WBC.AU +1.29% currency strategist Sean Callow. Callow said he expected Japan's Ministry of Finance to refrain from any intervention ahead of the Bank of Japan's policy meeting Wednesday. Asian currencies were mixed Monday. The dollar hit a fresh six-month low against the Korean won at KRW1,114.70 as foreign investors bought up Korean equities. The Singapore dollar, meanwhile, weakened against the U.S. unit following a sharper-than expected drop in August exports. That is feeding expectations that the Monetary Authority of Singapore will ease up on its strong-Singapore dollar stance at its October policy meeting, which could in turn lead to some unwinding of bullish Singapore-dollar positions. Meanwhile the Australian dollar slipped against the greenback to trade at $1.0536 at 0615 GMT, down from $1.0552 late Friday. Write to Martin Vaughan at martin.vaughan@dowjones.com

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