USD/JPY slides on soft U.S. home sales figures

The dollar dipped against the yen on Wednesday after official data revealed that U.S. home sales came in softer than expected in March.

In U.S. trading, USD/JPY was down 0.33% and trading at 102.27, up from a session low of 102.17 and off a high of 102.70.

The pair was expected to test support at 101.87, Thursday's low, and resistance at 102.73, Tuesday's high.

The Commerce Department reported earlier that sales of new homes in the U.S. fell to the lowest level since July 2013 in March.

Sales on new homes dropped 14.5% to a seasonally adjusted rate of 384,000, lower than analysts' forecasts for a sales rate of 450,000.

The data reminded investors that the Federal Reserve plans to keep interest rates low for the foreseeable future even when stimulus programs wind down, which softened demand or the greenback.

The yen, meanwhile, was up against the euro and up against the pound, with EUR/JPY down 0.28% at 141.26, and GBP/JPY trading down 0.66% at 171.49.

The euro zone manufacturing purchasing managers’ index rose to 53.3 this month from 53.0 in March, according to Markit Economics, beating expectations for an unchanged reading.

The bloc’s services PMI rose to 53.1 from 52.2 the previous month, better then forecasts for a 52.4 reading.

The recovery in Germany, the euro zone’s largest economy accelerated this month, with activity in both the manufacturing and service sector strengthening, but growth in the French private sector lost momentum.

Uncertainty over European monetary policy weakened the euro against the yen, however.

ECB President Mario Draghi has warned that further gains in the euro would trigger additional monetary easing to keep inflation rates in comfort zones.

The annual rate of euro zone inflation slowed to 0.5% in March, the lowest since November 2009.

On Thursday, Draghi is due to speak in Amsterdam, and markets remained in standby mode ahead of then.