TOKYO: The dollar was marginally higher against the yen and euro Tuesday ahead of a closely watched Federal Reserve policy meeting, while the yen faced pressure after the Bank of Japan warned of zero inflation "for the time being".
In midday Tokyo trading, the greenback was at 121.43 yen, up slightly from 121.35 yen in New York late Monday.
The euro, which hit a 12-year low Monday below $1.0500, bought $1.0570 against $1.0565 in US trade.
The single currency also fetched 128.37 yen compared with 128.21 yen in New York.
The BoJ on Tuesday held off widening its stimulus programme but said tumbling energy prices could push inflation to zero, marking another setback for Tokyo's attempt to lift prices and kickstart the economy.
"The year-on-year rate of increase in the CPI (consumer price index) is likely to be about 0 percent for the time being, due to the effects of the decline in energy prices," the central bank said in a statement after wrapping up a two-day policy meeting.
US industrial production barely rose in February after two consecutive months of declines, and was only pulled higher by heating demand during unusually cold weather, according to Federal Reserve data published Monday.
Also, manufacturing declined for the third straight month as automakers curbed output.
The readings came as the Fed prepares to hold a two-day policy meeting from Tuesday, which will be closely watched for clues about its timing for a rate hike.
Expectations have been high for an increase as early as June after a strong jobs report at the start of the month, but they have been tempered by the latest figures, as well as data Friday showing falling producer prices.
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