LONDON (AFX) - The dollar remained weak against the yen on a rally in Japanese equities, dealers said.
They said signals that Japanese authorities do not favour a weak yen also reversed the currency's slide.
"Those two factors meant the dollar, after failing to test the 120 yen barrier, has started to ease," Halifax economist Steven Pearson said.
Dealers noted the euro's weakness against the dollar on weaker data coming out of the euro zone, including a rise in German jobless figures for February.
"On top of that, the European Central Bank isn't going to lower rates in the near term because of fears about inflation, which puts further pressure on the euro," Pearson said.
Dealers said sterling remained firm on the UK's relatively robust economic prospects despite the U.S. downturn and dashed rate-cut hopes.
They said the Bank of England's monetary policy committee was expected to leave the repo rate unchanged on Thursday at the end of its monthly meeting, given the state of the UK economy.
"It'll probably do nothing this time but perhaps make a move next month, depending on the UK figures in the meantime," Pearson said.