By Hiroyuki Kachi

The dollar was lower against the yen and other rival currencies in rangebound Asia trade Wednesday, with its upside capped by a bout of profit-taking.

The U.S. currency was changing hands at Y113.44 around 0450 GMT after touching an intraday high of Y113.73 earlier in the session. That compared with Y113.66 late Tuesday in New York.

The euro was at $1.0546 in midday Asia trade, compared with $1.0537 late Tuesday.

The WSJ Dollar Index, a measure of the U.S. dollar against a basket of major currencies, was down 0.12% at 91.18.

"I don't feel there was incentive-backed selling [of the dollar]," said Kenji Yoshii, foreign-exchange strategist at Mizuho Securities, adding that the dollar met selling on recovery after overnight gains.

Investors showed a muted reaction to remarks by Bank of Japan Governor Haruhiko Kuroda, who said a further reduction of negative rates was off the table.

"There is not much likelihood that we will further lower the negative rate" from the current minus 0.1%, Mr. Kuroda said in parliament, citing Japan's accelerating growth and his optimistic inflation forecast.

"I don't think the remarks were something that surprises the market," said Mizuho's Mr. Yoshii.

Judging by their options-related positions, investors appeared to be cautious about the prospects for the yen against the dollar over the next one- to two-month period, Mr. Yoshii said, suggesting that they were betting on a stronger dollar on expectations of a robust U.S. fiscal stimulus under the Trump administration.

However, the risk reversals in investors' positions showed they also were hedging bets on a weaker yen over the coming three-month period, indicating concerns over potential political instability in the eurozone including the French elections, Mr. Yoshii said. Investors buy the safety of the haven Japanese currency at turbulent times.

The dollar gained overnight after comments made Tuesday by Federal Reserve officials, including Philadelphia Fed President Patrick Harker, who said he wouldn't take a March rate increase "off the table."

Investors were awaiting the release of the Fed's minutes from its Jan. 31-Feb. 1 policy meeting to get more clarity about the central bank's possible next move.

In other currency trade, the euro was trading at Y119.64 midday from Y119.77 late Tuesday.

Interbank Foreign Exchange Rates At 22:50 EST / 0350 GMT 
 
                           Latest       Previous   %Chg    Daily    Daily   %Chg 
Dollar Rates                               Close            High      Low  12/31 
 
USD/JPY Japan           113.44-45      113.68-69  -0.21   113.73   113.33  -3.04 
EUR/USD Euro            1.0545-48      1.0535-38  +0.09   1.0558   1.0534  +0.26 
GBP/USD U.K.            1.2495-97      1.2471-73  +0.19   1.2509   1.2470  +1.22 
USD/CHF Switzerland     1.0086-90     1.0097-101  -0.11   1.0101   1.0078  -0.99 
USD/CAD Canada          1.3124-29      1.3141-46  -0.13   1.3152   1.3112  -2.34 
AUD/USD Australia       0.7688-92      0.7674-78  +0.18   0.7699   0.7666  +6.78 
NZD/USD New Zealand     0.7165-71      0.7157-63  +0.11   0.7177   0.7154  +3.51 
 
Euro Rate 
 
EUR/JPY Japan           119.62-66      119.77-81  -0.13   119.88   119.57  -2.81 
 
 
Source: Tullett Prebon

Write to Hiroyuki Kachi at hiroyuki.kachi@wsj.com

(END) Dow Jones Newswires

February 21, 2017 23:48 ET (04:48 GMT)

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