TOKYO/SINGAPORE: The yen inched higher against the dollar on Wednesday, supported by seasonal flows from Japanese exporters who bought the yen with the end of their financial year approaching.
The dollar slipped 0.3 percent to 82.97 yen, while the euro eased 0.1 percent to 110.63 yen and inched away from a 4-1/2 month high of 111.43 yen hit last week on trading platform EBS.
Yen buying by Japanese exporters tends to pick up steam at the month-end, and there has been additional focus on their potential flows recently as the financial year for most Japanese companies closes at the end of March.
Such seasonal factors helped spur yen-buying by Japanese exporters on Wednesday, despite the fact that some had already hedged their foreign exchange exposure for the next few months.
"They may have hedged all the way down to June or even beyond that, but there are always some orders one has to execute at the end of the financial term," said a customer dealer for a major Japanese bank in Tokyo.
The dollar has taken a breather from its recent rally against the yen as profit-taking emerged after the greenback hit an 11-month high of 84.187 yen earlier this month on trading platform EBS.
The yen has been under pressure since the Bank of Japan's surprise monetary easing in February, while the dollar has drawn support from recent rises in US Treasury yields.
The euro rose 0.1 percent to $1.3331, inching back in the direction of a one-month high near $1.3386 hit at one point on Tuesday.
The single currency came under a bit of pressure on Tuesday after hitting its one-month peak, as the safe-haven dollar edged higher, supported by a slight retreat in US equities.
Analysts said Federal Reserve Chairman Ben Bernanke's comments on Tuesday again sounded dovish, and seemed similar in tone to remarks he made on Monday.
Bernanke said on Tuesday it is too soon to declare victory in the US economic recovery, warning against complacency in policy-making as the outlook brightens.
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