LONDON (AFX) - The yen strengthened against most leading currencies in early trade, boosted by overnight comments from Japan's Finance Minister Kiichi Miyazawa, dealers said.
Audrey Childe-Freeman, economist at CIBC World Markets, said the yen correction came as a result of Miyazawa's comments that Japan is aware of the issues that a weaker yen could cause for the rest of Asia.
She added: "Further verbal intervention from Japan is leading to a more cautious approach on the yen, even though a further downgrade on Japan in the EPA economic assessment is not good for the currency."
Meanwhile, the euro opened the session down against major currencies on last-minute doubts as to whether or not the European Central Bank will cut its key rate on Wednesday. It then recouped some ground.
Dealers expect the single European currency to remain confined to narrow ranges ahead of tomorrow's ECB governing council.
Childe-Freeman said: "It's not a done deal at all and investors are now wond ering whether a will cut will take place."
Sterling/dollar remained firm after the release of a firm British Retail Consortium survey.
Figures from the BRC showed like-for-like retail sales increased by 4.8 pct in March, while the three month trend for like-for-like sales improved from 3.3 pct to 3.8 pct.
"This BRC was quite supportive for sterling today after yesterday's sterling/dollar upward move on mergers & acquisitions flows," said Childe-Freeman.