TOKYO The dollar held steady on Wednesday, awaiting the Japanese gross domestic product data due later in the day for cues after failing to sustain gains following its advance to a three-week high versus the yen.
Economists polled by Reuters expect Japan's GDP to have grown at a modest 0.1 percent in the January-March quarter in annualized terms, highlighting the slowdown in the world's third largest economy.
"Japan risks slipping into a technical recession. In that case, expectations will increase for further fiscal stimulus, a delay in the consumption tax hike and more monetary easing," said Masafumi Yamamoto, chief FX strategist at Mizuho Securities in Tokyo.
"These factors would be supportive for dollar/yen as they could add weight to the argument for intervening to weaken the yen."
The dollar stood little changed at 109.13 yen JPY=. The U.S. currency had briefly spiked to 109.65, its highest since April 28, on Tuesday after data showed U.S. consumer prices recorded their biggest increase in more than three years in April.
The greenback, however, drifted off the high as U.S. equities flagged and nudged down Treasury bond yields.
The euro was steady at $1.1312 EUR= after closing little changed against the dollar overnight.
The pound treaded water at $1.4455 GBP=D4. Sterling spiked to $1.4524 overnight after a pair of polls showing the "In" camp well ahead in the run-up to Britain's June 23 referendum on European Union membership.
The gains were trimmed however by lower-than-expected U.K. inflation data.
The Australian dollar AUD=D4 slipped 0.1 percent to $0.7320, consolidating after rallying on Tuesday when minutes of the Reserve Bank of Australia's (RBA) May policy meeting encouraged markets to pare back the chances of a cut in interest rates.
(Reporting by Shinichi Saoshiro; Editing by Eric Meijer)
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Updated Date: May 18, 2016 05:45 AM