USD/JPY extends losses on Fed inflation concerns

The dollar traded lower against the yen on Thursday as investors continued to avoid the greenback and take on risk after the Federal Reserve's March meeting minutes revealed monetary authorities unanimously voted to scrap a rate-hike trigger.

In U.S. trading, USD/JPY was down 0.50% and trading at 101.48, up from a session low of 101.33 and off a high of 102.14.

The pair was expected to test support at 101.28, the low from March 18, and resistance at 104.12, Friday's high.

The Federal Reserve Board of Governors unanimously voted to scrap a threshold that would hike interest rates once the unemployment rate hits 6.5%, according to the minutes of the Fed's March policy meeting released Thursday, a sign monetary authorities are growing concerned over low inflation rates.

In the past, the Fed had indicated rates were set to rise when the unemployment rate hits 6.5% provided that figure accompanied a 2.5% inflation rate.

Today, the headline unemployment rate stands at 6.7%, not far from the previous threshold, though labor markets remain slack and inflation remains well below 2.5%.

The Federal Reserve decision to do away with its rate-hike target left markets convinced that interest rates will remain low for some time to come, even after the U.S. central bank winds down monetary stimulus programs.

The minutes indicated growing concerns among monetary authorities over persistently low inflation rates.

'In light of their concerns about the possible persistence of low inflation, members agreed that inflation developments should be monitored carefully,' the Fed minutes said.

Elsewhere, the Labor Department reported that the number of individuals filing for initial jobless benefits in the week ending April 4 fell by 30,000 to 300,000, the lowest since May of 2007, from the previous week’s upwardly revised total of 332,000.

Analysts had expected jobless claims to decline to 320,000, though the numbers did little to boost the dollar against the euro.

The yen, meanwhile, was up against the euro and up against the pound, with EUR/JPY down 0.29% at 140.90, and GBP/JPY trading down 0.59% at 170.28.