Dollar regains some ground vs. yen but gains capped

The dollar regained some ground against the yen on Wednesday, after dropping to three-week lows in the previous session after the Bank of Japan indicated that it was unlikely to implement further stimulus measures in the short term.

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 pair was likely to find support at 101.76, the session low and resistance at 102.40.

The yen strengthened broadly on Tuesday after 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.

The euro also pushed higher against the yen, with EUR/JPY rising 0.13% to 140.66, up from Tuesday’s lows of 140.07.

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.

On Tuesday, the International Monetary Fund said the ECB should consider all unconventional measures, including quantitative easing, and should implement them as soon as they are ready.

Elsewhere, the euro edged lower against the dollar, with EUR/USD dipping 0.11% to 1.3781.

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.