The US dollar was slightly weaker against the yen and the euro in afternoon trading here ahead of this week's European Central Bank meeting, dealers said. They said the dollar dipped mildly against the yen following comments by Japanese finance minister Koji Omi that deflation in Japan was over. Omi, who was appointed by Japan's new Prime Minister Shinzo Abe last week, said: "Looking at the economy in general, we can declare an end to deflation." "It is unnatural for us not to announce the end to deflation at this moment," Omi told a press conference, suggesting that conditions may now be supportive of further interest rate hikes since deflation was no longer a threat. The euro initially drifted higher against both the dollar and the yen, supported by expectations the ECB will raise interest rates by 25 basis points to 3.25 pct at its policy meeting this Thursday, before ending little changed against both currencies. Looking ahead, dealers said the outlook for the dollar is weak at this point, especially with the market pricing in a possibility that the Federal Reserve may cut interest rates next year, while the ECB and the Bank of Japan are seen starting their tightening cycles. "If the prospects of rate hikes in Japan did not as yet harm the US dollar, the prospects of Fed rate cuts may," UBS forex strategist Nizam Idris said in a morning note. US data due this week could also create additional downside pressure for the dollar, although the key data release is still Friday's non-farm payrolls data. According to a Market News International survey, payrolls are forecast to rise 125,000 in September, in line with recent monthly readings. "With the next round of monthly data to be released this month likely to lend more support to the notion that Fed is more likely to ease than to hike again, we could see the US dollar facing a tougher climb against both the yen and the euro at elevated levels," UBS's Nizam said. Ahead of Friday's release, the ISM's September non-manufacturing index and factory new orders data are due on Wednesday, with the ISM index expected to fall to a reading of 56.0, while new orders are expected to fall 0.2 pct in August.