Investing.com - The Japanese yen traded lower on Wednesday in Asia as risk aversion eased, but disappointing Japanese trade figures underlined the need for continued support for the trade-dependent economy.
The USD/JPY pair traded 0.3% higher to 109.65 by 11:39 PM ET (04:39 GMT).
Data showed on Wednesday that the country’s exports and imports fell short of market expectations, with exports posting the biggest fall in more than two years.
Meanwhile, the Bank of Japan (BOJ) kept its monetary policy steady on Wednesday as expected. The BOJ maintained its short-term interest rate target at minus 0.1% and trimmed its forecast for core consumer inflation to 0.9% in the fiscal year beginning in April from 1.4%.
The central bank also maintained its view that Japan's economy will continue to expand at a modest pace.
"Japan's economy is likely to continue on an expanding trend through fiscal 2020," the central bank said in its quarterly outlook report.
"Overseas economies are expected to continue growing firmly on the whole, although various developments of late warrant attention such as the trade friction between the United States and China."
The Japanese currency received some support on Tuesday following reports that the International Monetary Fund (IMF) cut its 2019 and 2020 global growth forecasts.
Meanwhile, the USD/CNY pair lost 0.3% to 6.7836. China’s Finance Ministry officials said on Wednesday that Beijing would step up fiscal spending this year to support its economy.
The People's Bank of China (PBOC) set the yuan reference rate at 6.7969 on Wednesday vs the previous day's fix of 6.7854.
The U.S. dollar index that tracks the greenback against a basket of other currencies traded near flat at 95.980.
Sino-U.S. trade frictions received some attention this week. Overnight, The Financial Times reported that the White House rejected a trade meeting with Chinese officials this week.
U.S. equities traded lower following the report, although White House economic advisor Larry Kudlow later denied that an official meeting had been cancelled and said that “there was never a planning meeting” other than the visit by Chinese Vice Premier Liu He next week.
Elsewhere, the AUD/USD pair and the NZD/USD pair traded 0.2% and 0.4% higher.