TOKYO, June 19 (Reuters) - Japanese manufacturers have raised their assumptions for the yen's exchange rate against the dollar that they use in their business plans for the year to next March, compared with three months ago, a Reuters poll showed.

The median internal rate, the exchange rate assumption that firms use in their business plans, for the 2008/09 business year that started in April was 105.00 yen to the dollar according to 84 manufacturers that took part in the Reuters Tankan survey conducted from May 27 to June 16.

That was a higher exchange rate for the yen compared to a median internal rate of 108.00 yen to the dollar in a previous poll conducted three months earlier.

"Our internal rate for 2007/08 had been 115 yen to the dollar, but we think the U.S. economy will slow down due to factors such as the subprime issue," said an official for a transport machinery maker, which set an internal rate of 105.00 yen to the dollar for the current business year.

Manufacturers were more upbeat about the euro than the dollar.

Among the 48 manufacturers that provided their internal rates for the euro, the median internal rate against the single European currency for 2008/09 was 160.00 yen compared with 157.00 yen in the previous survey.

"Interest rate differentials between Japan and countries with higher interest rates are likely to widen and cause the yen to weaken," said an official for a textile company that has an internal exchange rate for the euro of 163.00 yen for the current business year. The dollar sank to a 13-year low of 95.77 yen in mid-March as concerns about U.S. financial institutions' losses from the credit market turmoil deepened.

But the dollar has since rallied by as much as 13.4 percent, having hit a four-month high near 108.60 yen on Monday, buoyed by market expectations for the Federal Reserve to raise interest rates later this year to curb inflation and signs of a shift in U.S. officials' stance toward the dollar.

The euro climbed to an 11-month peak around 168.05 yen on Wednesday, approaching a record high of 169.05 yen hit last July. The euro has gained a lift from market expectations for the European Central Bank to raise interest rates in July.

The Reuters Tankan is a monthly survey of leading Japanese firms designed to closely track the Bank of Japan's quarterly tankan survey.

Following is a table of the results:

INTERNAL RATES FOR FISCAL 2008/09 (DOLLAR/YEN)

HIGHEST LOWEST MEDIAN

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MANUFACTURING 120.00 100.00 105.00

(84 firms)

INTERNAL RATES FOR FISCAL 2008/09 (EURO/YEN)

HIGHEST LOWEST MEDIAN

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MANUFACTURING 180.00 140.00 160.00

(48 firms)