TOKYO (AFX-ASIA) - The dollar drifted higher against the yen in thin midafternoon trade but still hovering around the mid-121 yen level, with few fresh leads after yesterday's surprise BoJ easing, dealers said. "The greenback fell to 121.37 yen in the morning as Japanese institutional investors increased dollar selling, transfering dollar receipts on their US bond-holdings," Industrial Bank of Japan forex manager Tatsuro Karitani said. "The dollar is in a downward correction phase as hedge funds who had leaned toward long-dollar positions are selling the currency," he said. "That was why the dollar slipped to the 121 yen level in New York overnight after the dollar surged to the 123 yen mark just after the Bank of Japan's unexpected decision to further relax its monetary policy yesterday." Karitani said the euro tested its recent highs against the dollar but then lost momentum on options-related selling. "The euro is still hovering at high levels. In the afternoon, the market tested the important level of 0.9052 to the dollar, at which point some options traders are believed to have sold. "The euro is in an upward correction phase in the long run, after posting an all-time low of 82 cents due to the difference in the strength of the economies in the US and euro-zone area," he added. "The euro has maintained its strength against other major currencies in recent weeks. At present, the dollar/yen's limited advance has affected the euro/yen but it will eventually turn upward," he said.