By Suryatapa Bhattacharya

TOKYO--The Japanese yen pared back in midday Asian trading on Tuesday after strengthening against the U.S. dollar overnight, even as markets lacked direction, awaiting the next big move.

The dollar is at Y112.70 compared with Y112.55 late Monday in New York.

The dollar fell to session lows versus the yen as Japan markets opened following Monday's holiday. In early Asian trading, the dollar hit a three-week low of Y112.26. "There is no apparent news trigger" for the pair's latest drop, said Mizuho Securities chief FX strategist Kengo Suzuki. The WSJ Index was up 0.04% at 90.52.

Some investors were reviewing their positions as the dollar's weakness continued from last week, causing "the dollar-yen pair to somewhat fluctuate in the 113 range," said Koji Fukaya, chief executive of FPG Securities.

A lack of economic and financial news, especially for investors looking to the White House for updates on potential policy changes, was behind the market's wait-and-watch approach. "We are really in a sort of vacuum almost," said Bart Wakabayashi, Tokyo branch manager with State Street. "The infatuation with Trump has exhausted the market." As a result, real-money investors were holding back while position-takers or punters, people who trade for profit, were flowing.

Meanwhile, after hitting a low for the week at $1.0719, the euro rebounded some during Asian trading Tuesday to get back above $1.0740. Amid speculation that the time may be soon coming for the European Central Bank to pull back on some of its policy-easing efforts, the euro has climbed this month. But amid a lack of fresh trading cues for the rest of the Asia session, a Japanese bank dealer said the euro was liable to trade from $1.07-1.0780 Tuesday.

Given looming uncertainty, the British pound continues to be undervalued but "does it mean 'Go buy it now?' I don't think so," State Street's Mr. Wakabayashi said. While the sterling's volatility hinges on Britain's preparation to exit the European Union, he noted that it had been a beneficiary from the lack of real-money transactions as economic and financial news means investors were sidelined. Overnight, the pound pulled back from a three-week high as Prime Minister Theresa May set a date to trigger Brexit, but the currency recovered some to sit around $1.2360 in midday Asian trading Tuesday.

--Hiroyuki Kachi contributed to this article.

Interbank Foreign Exchange Rates At 00:50 EST / 0450 GMT 
 
                         Latest     Previous   %Chg   Daily   Daily    %Chg 
                                    2150 GMT          High    Low      12/31 
 
Dollar Rates                               Close            High      Low  12/31 
 
USD/JPY Japan           112.70-71      112.55-56  +0.13   112.80   112.27  -3.68 
EUR/USD Euro            1.0755-58      1.0739-42  +0.15   1.0772   1.0720  +2.25 
GBP/USD U.K.            1.2360-62      1.2356-58  +0.03   1.2382   1.2354  +0.13 
USD/CHF Switzerland     0.9986-90      0.9983-87  +0.03   1.0003   0.9966  -1.97 
USD/CAD Canada          1.3353-58      1.3350-55  +0.02   1.3359   1.3324  -0.64 
AUD/USD Australia       0.7707-11      0.7729-33  -0.28   0.7738   0.7700  +7.04 
NZD/USD New Zealand     0.7037-43      0.7051-57  -0.20   0.7064   0.7039  +1.66 
 
Euro Rates 
 
EUR/JPY Japan           121.20-24      120.86-90  +0.28   121.34   120.67  -1.53 
 
 
 
 
Source: ICAP PLC

Write to Suryatapa Bhattacharya at suryatapa.bhattacharya@wsj.com

(END) Dow Jones Newswires

March 21, 2017 02:06 ET (06:06 GMT)

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