TOKYO (AFX-ASIA) - The dollar was easier in midafternoon trading reflecting investor caution over the release later today of the US GDP data, dealers said. Earlier, the dollar rose to 120.14 after Hakuo Yanagisawa, state minister for the Financial Services Agency reportedly said the government now aims to cut bad loans held by banks to 7-10 trln yen from the current 17 trln over the next seven years. The government pledged under the economic stimulus package released in April to clean up non-performing loans over the next two to three years. The fall in the Nikkei 225 index to close to the 11,000 point level also supported the early rise of the dollar against the yen, dealers said. But Canadian Imperial Bank for Commerce (CIBC) executive director Yasushi Takeishi said Yanagisawa's reported comments, as well as the decline in the Nikkei 225 index failed to have a lasting impact, as the market is still in search of negative leads for the dollar. "Perhaps, even if the Nikkei 225 index were to fall to below the 11,000 point level, room for decline in the yen will be not be so large," he said. Local players, after adjusting long dollar positions built earlier, were unwilling to take fresh positions ahead of the US GDP data, dealers said. Investors were also reluctant to take fresh positions ahead of the release tomorrow of Japan's July industrial output data, which, according to local economists, is expected to show a month-on-month fall of 2.2 pct following a 0.8 pct decline in June, they said. But, CIBC's Takeishi said, it now seems that "poor economic data in Japan is no longer capable of supporting the dollar strongly." "The dollar may not begin to trend higher, unless it tests the 118.50 yen level," Takeishi said. The euro was well supported against the dollar following the weak consumer confidence data in the US and ahead of the GDP data, with expectations of possible rate cuts tomorrow by the European Central Bank also supporting the currency, dealers said. "But it seems that gaining any strong momentum above the 0.92 usd level appears to be difficult," Takeishi said.