The dollar fell in Asia after Bank of Japan Policy Board member Atsushi Mizuno suggested in a speech that Japanese interest rates will rise, albeit gradually, so long as the economy grows in line with BOJ expectations. His remarks were seen as more restrained than those of BOJ Governor Toshihiko Fukui, who reiterated on Tuesday that rate rises would be gradual but said the central bank would not wait for risks to the economy to appear before tightening policy. Markets generally expect the BOJ to raise rates some time in the first quarter of next year from 0.25 percent currently, with any indication they could rise faster boosting the low-yielding yen. "Even if rates are going up and even if we assume the market is too relaxed about the pace of hikes, we are still talking about Japanese rates at very low levels. The yen is a funding vehicle for carry trades as long as risk appetite remains at an elevated level," Rabobank markets strategist Jeremy Stretch said. Investors shrugged off comments by Richmond Fed President Jeffrey Lacker that the U.S. central bank had failed to emphasise its desire for lower inflation.