The euro slipped against the yen and the dollar on Thursday as investors took profits before a widely expected interest-rate increase by the European Central Bank later in the session. The ECB is seen raising rates to 3.25 percent to keep inflation in check, and investors are keenly awaiting comments from ECB President Jean-Claude Trichet for his signals on future credit tightening. "The market is watching whether Trichet uses the key expression 'monitoring closely' when talking about inflation, which would signal another rate hike in two months," said Hiroki Shimazu, market analyst at Mizuho Securities. Analysts said the euro lost some ground partly on expectations that Trichet may comment on the single currency's strength against the yen, with the euro still in sight of its all-time high above 150 yen. After the meeting of Group of Seven finance ministers and central bankers last month, Trichet and then Japanese Finance Minister Sadakazu Tanigaki made seemingly coordinated remarks that the yen should reflect Japan's recovery from deflation. "I think it's clear there was some agreement between European officials and Japan around the G7 that euro/yen's further rise is undesirable," said Masafumi Yamamoto, currency strategist at Nikko Citigroup in Tokyo. "Each time euro/yen goes higher, I expect comments from Europe. But the impact is not that large because people expect the yen to stay weak," he said. Bank of Japan Deputy Governor Toshiro Muto repeated on Thursday the central bank's plan to raise rates gradually and said the BOJ had no preset idea about whether it would raise rates by year-end from the current 0.25 percent. With the BOJ taking a go-slow approach to normalising rates from zero, the Japanese currency has suffered across the board as investors keep dumping it for higher-yielding counterparts, partly in carry trades. Currencies have mostly been confined to tight ranges in the past few months, keeping some market players on the sidelines as they await a return to more sustained volatility.