TOKYO: The euro held steady on Wednesday as investors hoped that last-ditch talks on Greece's debt would see a breakthrough deal that keeps it in the eurozone.
In Tokyo trading, the common currency bought $1.1405 and 135.84 yen, down from $1.1413 and 136.13 yen in New York but well above $1.1357 and 134.70 yen in Tokyo earlier Tuesday.
The dollar slipped to 119.09 yen from 119.29 yen, but was up from 118.55 yen in Tokyo on Tuesday. The yen strengthened slightly Wednesday after the Bank of Japan held off launching further easing measures following a two-day policy meeting.
"Right now, it's all about Greece," said Kazuo Shirai, a trader at MUFG Union Bank.
"The euro was bought amid speculation there's still scope for further talks."
Greek public television said Tuesday that the country's new government would apply for further aid from its European partners, although it would not sign up to the painful austerity measures imposed on the country.
The news will come as a relief after two eurozone finance ministers' meetings in the past week both collapsed without agreement, as Athens refused to continue with the bailout that imposed swingeing spending cuts and tax rises.
The apparent U-turn also comes days before Athens' financial lifeline package expires, which would leave it unable to pay its bills, leading to default and Greece almost certainly leaving the eurozone.
"There's a bit more hope for progress in resolving the Greek problem, which is fuelling risk sentiment and weakening the yen," Yuji Kameoka, chief foreign-exchange strategist in Tokyo at Daiwa Securities, told Bloomberg News.
"If we get word of concrete headway being made in the negotiations, it's very possible the yen will weaken beyond 120 per dollar."
On Wednesday Bank of Japan policymakers said the country's economy was seeing a "moderate recovery trend", but they further cut back on inflation expectations, in a sign that its price targets look increasingly out of reach.
The central bank's decision to keep its already massive stimulus unchanged was widely expected, but analysts have said that weak economic growth figures may force its hand later this year.
On Monday official data showed the economy limped out of recession in the last quarter of 2014, with a weaker-than-expected 0.6 percent expansion between October and December.
The dollar was mixed against other Asia-Pacific currencies.
It rose to Tw$31.61 from Tw$31.51 on Tuesday, to Sg$1.3585 from Sg$1.3553, to 62.27 Indian rupees from 62.16 rupees, to 12,810.00 Indonesian rupiah from 12,761.50 rupiah, and to 1,110.45 South Korean won from 1,101.94 won.
The greenback fetched 44.24 Philippine pesos from 44.27 pesos, and stayed unchanged at 32.58 Thai baht.
The Australian dollar firmed to 78.21 US cents from 78.00 cents, and the Chinese yuan edged up to 19.03 yen from 18.95 yen.
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