The U.S. dollar is predicted to be firm against the yen this week in Tokyo in light of the better economic fundamentals in the United States compared with Japan.

"The figures point to a strong dollar. There is no change in the weak yen trend," said Yasushi Ishikawa, deputy manager of the financial engineering team at Credit Lyonnais in Tokyo.

Data released last week showed that U.S. gross domestic product rose an annual 0.2 percent in the fourth quarter of 2001, reflecting growth in personal consumption and government spending.

The U.S. Federal Open Market Committee ended its two-day meeting Wednesday keeping interest rates unchanged, ending the series of rate cuts it started at the beginning of last year.

But in Japan, the jobless rate rose to a record 5.6 percent in December.

Many dealers said they expect the dollar to trade between 133 yen and 136 yen, with some saying a climb to 137 yen is possible.

Last week, the dollar traded mostly at the 133 yen level as selling for position adjustment kept a lid on its rise.

But on Friday the dollar rose to 135.04 yen, entering the 135 yen territory for the first time since October 1998 on worries about a drop in Prime Minister Junichiro Koizumi's popularity. The dollar temporarily touched 135.20 yen in New York.

The approval rate of Koizumi's Cabinet dropped to 55.6 percent from a high of 85.6 percent in December in an emergency opinion poll conducted Thursday by TV Tokyo after Koizumi's dismissal of Foreign Minister Makiko Tanaka over her squabbles with bureaucrats in her scandal-ridden Foreign Ministry.

"With his approval rating down, people are wondering whether Prime Minister Koizumi will be able to swiftly push forward with structural reforms," said a dealer at ABN AMRO Bank in Tokyo.

Ishikawa at Credit Lyonnais said there is also disappointment over Koizumi's failure to persuade former U.N. High Commissioner for Refugees Sadako Ogata to become foreign minister. "I think that has left a negative mark on the Koizumi administration," he said.

Dealers said they are worried that political uncertainties could drag down Tokyo stock prices and lead to a trend for "Japan selling."

On Friday, the Tokyo Stock Price Index (Topix) fell to a 17-year low of 956.26, down 15.51 points, while the 225-issue Nikkei Stock Average fell 206.37 points to 9,791.43, its lowest level since Sept. 28 last year.

Meanwhile, some dealers said they do not expect the dollar to make strong gains against the yen.

Hideyuki Tsukamoto, foreign-exchange manager at Fuji Bank, said dollar buying could be subdued on speculation that Japanese authorities will not allow too swift a rise in the dollar ahead of a weekend meeting in Ottawa of finance ministers and central bank governors from the Group of Seven major industrialized nations.

He noted that Bank of Japan Governor Masaru Hayami and Zembei Mizoguchi, head of the Finance Ministry's International Bureau, said this week the yen should not be guided lower as a means to boost the domestic economy.

"There's a subtle change in what the authorities are saying and the dollar could prove to be top-heavy," Tsukamoto said.