By Hideyuki Sano
TOKYO, Nov 22 (Reuters) - The dollar was on the back foot on Tuesday after snapping a 10-day rising streak as investors consolidated the gains built on expectations of increased fiscal spending and higher inflation under a Trump administration.
An earthquake with a preliminary magnitude of 7.3 and the subsequent tsunami warning in northern Japan also prompted knee-jerk selling in the dollar against the safe-haven yen in early trade. dollar slipped to 110.48 yen JPY= from Monday's high of 111.36, its highest level since May 30. It last stood around 110.63 yen.
The dollar's index against a basket of six major currencies .DXY =USD slipped to 100.87, off its 13 1/2-year high touched on Friday.
It has risen nearly 5 percent over the last 10 days, with investors betting increased fiscal spending by the incoming Trump administration would stoke inflation and propel interest rates higher.
An immediate target for the index is seen at 101.80, a 61.8 percent retracement of its seven-year decline from 2001 to 2008.
"There is a narrative that the there will be strong leadership because Republicans took the White House and the both houses of Congress. But we have to keep in mind that Trump also divided the nation as well as the Republicans," said Daisuke Uno, chief strategist at Sumitomo Mitsui Bank.
Uno added that the dollar's rally is likely to run out of steam around 112.43, a 50 percent retracement of the dollar's decline from 125.86 in June 2015 to 99.00 in June this year.
Trump also said on Monday that he will withdraw the United States from a Trans-Pacific Partnership trade deal on his first day in office, dashing hopes that he may soften his protectionist stance on international trade. the stock markets have cheered Trump's promises of deregulation and fiscal spending, his protectionism alarms many investors and could eventually hurt the currencies of countries with large trade deficits such as the United States.
As the dollar loses steam, the euro EUR= traded at $1.0635, bouncing back from near one-year low of $1.0569 hit on Friday.
The British pound held firm as the market processed Prime Minister Theresa May's latest hints on the possible shape of Britain's exit from the European Union.
May pledged to address concerns that Britain could fall off a "cliff edge" into uncertain trading conditions when it leaves the bloc.
Sterling traded at $1.2493 GBP=D4 , having climbed 1.2 percent on Monday.
Against the euro, the pound stood at 85.11 pence to the euro EURGBP=D4 , after having hit a two-month high of 84.89 on Monday.
It also stood not far from its September peak against the yen.
The offshore yuan CNH= traded at 6.9048 to the dollar, near Monday's 8 1/2-year low of 6.9177.