TOKYO: The euro edged higher on Wednesday after data showed eurozone deflation eased last month, although gains were limited as traders keep an eye on Greek bailout talks.
In Tokyo, the single currency bought $1.0781 and 128.96 yen, against $1.0741 and 128.95 yen in New York.
The dollar slipped to 119.63 yen from 120.06 yen.
On Tuesday, official figures showed prices in the eurozone fell 0.1 percent in March, narrowing a drop of 0.3 percent in February and 0.6 percent in January, giving some hope that the currency bloc could avoid a spiral of deflation.
The European statistics agency Eurostat said the unemployment rate also improved.
"Eurozone CPI (consumer price index) was exactly as expected...and German retail sales and unemployment data were somewhat better," National Australia Bank said in a commentary.
"The Greek 'issue'...continues to lurk in the wings as Germany's (Angela) Merkel suggests time is short for Greece to come up with an acceptable proposal."
On Tuesday, EU Council President Donald Tusk said a deal on Greece's bailout is possible before the end of April, as Athens continued to talk tough in talks with creditors over reforms.
Experts from the International Monetary Fund and the European Union are scrutinising a list of economic reforms proposed by Athens in a bid to unlock 7.2 billion euros in loans to stave off a possible default and euro exit.
Greece says the reforms would help raise an extra three billion euros for government coffers without resorting to wage and pension cuts.
Tusk claimed Athens could hold its own for the time being.
"I think that today we can say that the (economic) situation in Greece is under control," he said.
In China, manufacturing activity expanded in March for the first time since December, the government said Wednesday, while a downbeat business confidence report from the Bank of Japan highlighted doubts about a recovery in the world's number three economy.
The BoJ's closely watched Tankan report showed confidence among big manufacturers was the same as the previous quarter but below expectations.
While sentiment among non-manufacturers was more upbeat, they pared profit expectations while Japan's pessimistic corporate titans trim their spending plans.
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