Investing.com - The yen eased slightly in early Asia on Wednesday in a thin regional data day with geopolitical tensions over the Korean peninsula on the backfoot for now.
USD/JPY changed hands at 108.58, up 0.14%, while AUD/USD traded at 0.7562, up 0.03%. GBP/USD was last quoted up 0.02% to 1.2845.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, eased 0.79% to 99.41.
"The Beige Book is scheduled for release on Wednesday and while the U.S. economy in general continues to recover, if Fed districts report a slowdown, the dollar could extend its losses quickly," Kathy Lien, managing director of foreign-exchange strategy at BK Asset Management, said in a note late Tuesday.
Overnight, the dollar fell to three-week lows against a basket of the other major currencies on Tuesday, weighed down by geopolitical concerns and lackluster economic reports while sterling rallied after British Prime Minister Theresa May called for early elections.
The dollar edged lower against the safe haven yen, with USD/JPY dipping 0.14% to 108.74, not far from the five-month trough of 108.12 set on Monday.
Investors remained wary as trade talks between the U.S. and Japan got underway, with markets awaiting indications of the direction U.S. trade policy could take under President Donald Trump, who campaigned on a protectionist platform.
Heightened tensions around North Korea, which has vowed to conduct more missile tests following Sunday's failed missile launch, also continued to weigh on the greenback.
The greenback had found some support against the Japanese currency overnight following remarks by U.S. Treasury Secretary Steven Mnuchin.
Mnuchin, in an interview in the Financial Times newspaper said that while he agreed with U.S. President Donald Trump's view that the dollar's strength in the short term was hurting exports, he saw a strong U.S. currency over the long term as a positive.
Last week Trump said the dollar was getting too strong, sending the dollar index to its lowest level since late March.
Investors expect that May will win a substantial majority in the UK elections, which will prevent pro-European Union lawmakers from pushing for a ‘soft Brexit’.
Investors were continuing to monitor political developments ahead of the upcoming French presidential elections as the race tightened after a surge in polls for far-left candidate Jean-Luc Melenchon, who wants a referendum on the country’s European Union membership.
Markets have long since been anxious about front runner Marine Le Pen, leader of the far-right National Front party, who also wants to put the country’s EU membership to a vote and abandon the euro.
In the U.S., the Commerce Department reported that housing starts fell in March, likely due to bad weather, while building permits rose. Housing starts fell by 6.8% to hit a seasonally adjusted 1.215 million units last month, down from February’s total of 1.303 million units
The number of building permits issued rose 3.6% to a seasonally adjusted 1.260 million units last month from 1.213 million the month before. A separate report showed that U.S. industrial production rose 0.5% in March, in line with economists’ forecasts, while manufacturing production unexpectedly fell by 0.4% last month.