By Stefano Rebaudo
(Reuters) -The dollar struggled for direction on Tuesday ahead of key data that could provide further clues on the U.S. Federal Reserve's policy path, while the yen rose after figures confirmed inflation was above the Bank of Japan's (BOJ) target.
Japan's core consumer inflation exceeded forecasts, keeping alive some expectations that the BOJ might end negative interest rates by April.
«The yen rose after the release, but rather modestly considering its heavy short positioning and the magnitude of the sell-off since the start of the year,» said Francesco Pesole, forex strategist at ING.
«After all, the cautious BoJ is unlikely to send strong signals of an earlier move than April, and our economics team is doubtful policymakers will be able to hike before June at all.»
The yen rose 0.35% to 150.18. It hit in mid-February 150.88, its highest level since Nov. 16.
Leading cryptocurrecy Bitcoin hit a two-year high in Asian trade on signs of large players buying the cryptocurrency.
It was last at $56.360 after hitting $57,036 in the Asian morning, its highest since late 2021. Ether was at $3.232 after hitting $3,275, its highest since April 2022.
The U.S. dollar index, which measures the currency against a basket of peers, including the yen, euro and sterling, was down 0.05% at 103.71.
Markets have recently pulled back expectations on the timing and size of Fed rate cuts this year, as the U.S. economy remains strong and inflation pressures failed to subside significantly.
The release of the PCE deflator on Thursday is one of the key highlights in the U.S. calendar this week and could suggest less aggressive bets on Fed easing.
The euro was up 0.1% versus the greenback at 1.0859. It has steadily risen since
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