The US dollar was little changed against major currencies including the yen with market participants in Asia exercising caution ahead of a raft of key economic data from the US and Japan tomorrow, dealers said "Market players are awaiting a bout of important indicators here and in the US due for release Friday," said Harry Ida, senior analyst at Thomson Financial's IFR Forex Watch. Due out tomorrow in Japan include the latest inflation and industrial output data and in the US, market watchers are looking forward to the preliminary GDP data for the second quarter "Dealers are keen to know if the CPI will turn positive following positive comments from (Bank of Japan governor Toshihiko) Fukui yesterday," he said. The BoJ chief was confident about the outlook for Japan's economic recovery, saying the economy is on its way to overcoming the current stagnation. "Our view is that (the economy) is slowly becoming better and better," Fukui told reporters following a BoJ policy board meeting. "We're close to confirming an economic recovery where there is a good balance between internal and external demand," Fukui said. Thomson Financial's Ida said if the core CPI turns positive, this may boost the yen in the short-term on hopes the economy will head toward steady recovery sooner than the market had expected At 1.10 pm (0410 GMT), the dollar stood at 112.44 yen compared to 112.46 yen earlier in Sydney and 112.41 yen in late New York trade overnight The euro stood at 1.2071 usd, compared to 1.2073 usd in Sydney and 1.2069 usd in New York. Earlier in Asia, the yen rose on a report that China's central bank would allow market forces to decide yuan exchange rates following a 2.1 pct revaluation last week weighed, Ida said. The official Shanghai Securities News reported, without giving a specific timeframe, that the People's Bank of China was prepared to launch foreign exchange derivatives, including options and futures. This raised speculation that China could take faster steps toward a free float of the yuan, leading the yen to appreciate, strategists said. But Ida said the yen's gains were short-lived due to a lack of follow-through buying. He indicated the market bias remains for a firmer dollar and expect speculators overseas may eventually support the US currency. "If tomorrow's US gross domestic product data is upbeat, that could ignite active buying of the dollar," Ida said.