The yen edged up on Tuesday after the Bank of Japan stood pat on monetary policy and its chief, Haruhiko Kuroda, said there was no need to adjust monetary policy for now.
The BoJ maintained its massive monetary stimulus, as widely expected, and stuck to its view that economic growth and consumer price increases remain on track. It downgraded its view of exports but upgraded its view of capital expenditure and industrial production.
"Dollar/yen has been in a range between 101-104 yen for much of this year, and the yen needs a fresh trigger for the next leg of weakness," said Peter Kinsella, currency strategist at Commerzbank. "That could come from a steady deterioration in Japan's trade and current account deficits."
The BoJ's next meeting on April 30 comes after a sales tax increase scheduled to take effect on April 1. The central bank will also release its semi-annual economic outlook then, which investors say could give it an opportunity to alter its outlook and justify a policy move.
Data on Monday underscored the recovery remains fragile. Japan posted a record current account deficit in January, and its fourth-quarter gross domestic product growth was revised down, suggesting the effects of BoJ easing might have begun to wane.
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