USD/JPY trims losses on upbeat U.S. data

The dollar took back earlier losses and poked into positive territory against the yen on Thursday after upbeat regional U.S. factory and jobless claims data offset dovish remarks from Federal Reserve Chair Janet Yellen.

In U.S. trading, USD/JPY was up 0.02% and trading at 102.26, up from a session low of 101.87 and off a high of 102.27.

The pair was expected to test support at 101.33, Friday's low, and resistance at 103.37, Wednesday's high.

The dollar erased losses stemming from Federal Reserve Chair Janet Yellen's dovish speech on Wednesday and rose on cheery U.S. data.

The Federal Reserve Bank of Philadelphia reported earlier that its manufacturing index rose to 16.6 in April, the highest level since September, from 9.0 in March. Analysts had expected the index to tick up to 10.

Separately, the Labor Department reported that the number of individuals filing for initial jobless benefits in the week ending April 12 rose by 2,000 to 304,000, better than analysts' forecasts for a rise to 315,000.

On Wednesday, Fed Chair Janet Yellen said that monetary policy will need to remain accommodative for some time, citing slackness in the labor market and low inflation, which weakened the dollar, though Thursday's data gave the greenback fresh support.

The yen, meanwhile, continued to come under pressure after Japanese Central Bank Governor Haruhiko Kuroda told parliament now is not an appropriate time to discuss exiting stimulus policies.

The yen, meanwhile, was down against the euro and down against the pound, with EUR/JPY up 0.07% at 141.36, and GBP/JPY trading up 0.02% at 171.75.

Germany's producer price index contracted 0.3% in March from a month earlier and fell 0.9% on year.

Analysts were expecting a 0.1% monthly increase and a 0.7% on-year decline.

The numbers chipped away at the euro's gains over the yen, as a day earlier, data revealed that the annual inflation rate slowed to 0.5% in March from 0.7% the previous month, soft but in line with expectations.

Core inflation, which strips out volatile items like food and energy costs, fell to 0.7% from 1.0% in February, missing expectations for a 0.8% reading.

Euro zone inflation has now been in the European Central Bank's danger zone of below 1% for six straight months, fueling speculation that policymakers will need to implement fresh stimulus measures to shore up the fragile recovery in the euro area.