Dollar comes off lows but remains under pressu

The dollar recouped some ground against the yen on Wednesday, following the previous session’s steep losses, but remained close to three-week lows against a basket of major currencies.

USD/JPY was last up 0.21% to 102.02, after falling more than 1% on Tuesday, touching lows of 101.54, the weakest level since March 19.

The dollar fell sharply against the firmer yen on Tuesday after the Bank of Japan indicated that it was unlikely to implement further stimulus measures in the short term.

BoJ Governor Haruhiko Kuroda said the economy can weather a sales tax increase without further monetary policy measures to offset it. He added that growth and inflation were likely to continue to pick up in the coming months.

Investors were looking ahead to the minutes of the Federal Reserve’s March meeting due out later in the trading day, after last week’s U.S. payrolls report came in slightly below expectations.

Fed Chair Janet Yellen said recently that slack in labor markets showed accommodative policies will still be needed for some time.

Elsewhere, EUR/USD dipped 0.04% to 1.3791, not far from Tuesday’s one-week highs of 1.3810.

The single currency continued to remain supported as recent comments by senior European Central Bank officials indicated that there is no urgent need for quantitative easing to stave off the threat of deflation in the region.

The pound was trading close to one-month highs against the dollar, with GBP/USD edging down 0.07% to 1.6733. Sterling was boosted after the International Monetary Fund upgraded the U.K. growth forecast for this year on Tuesday.

The pound received an additional boost after upbeat industrial production data on Tuesday bolstered the outlook for the wider recovery and fuelled expectations that the Bank of England may raise interest rates sooner.

The dollar edged higher against the Swiss franc, with USD/CHF inching up 0.07% to 0.8837.

The Australian dollar remained supported close to four-and-half month highs, with AUD/USD edging up 0.05% to 0.9362. Earlier Wednesday, official data earlier showed that home loans in Australia rose 2.3% in February, beating expectations for a 2% increase.

Meanwhile, NZD/USD was trading at two-and-a-half year highs, rising 0.18% to 0.8690. USD/CAD edged up 0.05% to 1.0929.

The US Dollar Index, which tracks the performance of the greenback versus a basket of six other major currencies, inched up 0.04% to 79.89, holding just above Tuesday’s three week trough of 79.80.