Tokyo - The yen rebounded in Asia on Wednesday after it tumbled on the Bank of Japan's move to boost lending to commercial banks, as investors eye US housing data and minutes from the Federal Reserve's last meeting.
In late morning Tokyo trade, the dollar bought 102.21 yen, down from 102.40 yen in New York on Tuesday.
The euro slipped to 140.67 yen from 140.89 yen, while it was almost flat at $1.3762 against $1.3759. The unit was under pressure after a closely-watched survey showed investment sentiment in economic powerhouse Germany slipped from recent highs amid uncertainty about the strength of a US recovery.
On Tuesday, the Japanese currency plunged after the BoJ held off expanding its asset-buying programme but said it would boost some lending schemes to stimulate borrowing.
The move was taken as showing a willingness to launch future easing measures - which tend to weigh on the yen - as Japan gets set for a sales tax rise in April that some fear will derail a recovery in the world's third-largest economy.
The BoJ meeting came a day after fresh data showed that while Japan's economy expanded by 1.6 percent over last year, it slowed to 0.3 percent in the October-December quarter, presenting a major challenge for Prime Minister Shinzo Abe and his bid to reverse almost two decades of deflation.
Later on Wednesday, investors are looking to minutes from Ben Bernanke's last meeting as Fed chief, while his successor Janet Yellen gets set to face hard questions as the G20 holds its first meeting of the year this weekend.
Yellen will likely receive a grilling over the negative impact on emerging economies from the Fed's move to pull back on its stimulus drive, known as quantitative easing.
Currencies from Argentina to Russia, South Africa and Turkey have been in freefall, in part because heavyweight US investors are repatriating funds in anticipation of higher returns at home as the Fed tightens years of relaxed monetary policy.
“It will be interesting to see if there was any discussion to accelerate or slow the pace of tapering,” National Australia Bank said, referring to the Fed meeting minutes.
“Since the meeting we have had another weak payrolls, so the discussion on employment indicators will also be important for markets.”
Later on Wednesday, eyes will be on US housing starts for January, after an unexpected slump in home builder confidence.
“Going forward US data will likely be under greater scrutiny for clues on whether the current setback is indeed temporary, and housing releases will be under limelight today,” Credit Agricole said.