Tokyo - The dollar held up against the yen and euro on Tuesday ahead of a closely watched Federal Reserve policy meeting, while the yen faced pressure after the Bank of Japan warned of zero inflation “for the time being”.
In afternoon Tokyo trading, the greenback was at 121.36 yen, little changed from 121.35 yen in New York late on Monday.
The euro, which hit a 12-year low on Monday below $1.0500, bought $1.0567 against $1.0565 in US trade.
The single currency also fetched 128.26 yen compared with 128.21 yen in New York.
The BOJ on Tuesday held off widening its stimulus programme but said tumbling energy prices could push inflation to zero, marking another setback for Tokyo's attempt to lift prices and kickstart the economy.
“The year-on-year rate of increase in the CPI (consumer price index) is likely to be about 0 percent for the time being, due to the effects of the decline in energy prices,” the central bank said in a statement after wrapping up a two-day policy meeting.
US industrial production barely rose in February after two consecutive months of declines, and was only pulled higher by heating demand during unusually cold weather, according to Federal Reserve data published on Monday.
Also, manufacturing declined for the third straight month as automakers curbed output.
The readings came as the Fed prepares to hold a two-day policy meeting from Tuesday, which will be closely watched for clues about its timing for a rate hike.
Expectations have been high for an increase as early as June after a strong jobs report at the start of the month, but they have been tempered by the latest figures, as well as data on Friday showing falling producer prices.
The dollar was mixed against other Asia-Pacific currencies.
It eased to Tw$31.61 from Tw$31.64 on Monday, and to 1,129.56 South Korean won from 1,133.50 won.
The US unit also fell to Sg$1.3890 from Sg$1.3925, to 13,204.00 Indonesian rupiah from 13,237.50 rupiah, and to 62.68 Indian rupees from 62.91 rupees.
The dollar inched up to 32.91 Thai baht from 32.89 baht while remaining unchanged at 44.41 Philippine pesos.
The Australian dollar slipped to 76.38 US cents from 76.42 cents, while the Chinese yuan edged up to 19.40 yen from 19.37 yen.
AFP