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Tokyo - The euro rebounded modestly in Asia on Wednesday after it dropped in New York on reports that the European Central Bank could expand its bond-buying programme.
In Tokyo afternoon trade, the common currency fetched $1.2723 and ¥136.15 against $1.2714 and ¥136.04 in US trading on Tuesday. The single currency had been at $1.2800 and ¥136.86 the previous day.
The dollar edged up to ¥107.02 from ¥106.99, after fresh data on Tuesday showed US existing-home sales rebounded in September from a dip in August to their highest pace of the year.
Investors will be looking to US inflation figures later in the day after a series of uneven data has thrown into question the strength of the world's top economy, ahead of the US Federal Reserve's policy meeting next week.
"The US CPI (consumer price index) is at the forefront of attention," Ayako Sera, head of research team at Sumitomo Mitsui Trust Bank, told Dow Jones Newswires.
Late Tuesday, reports that the European Central Bank was considering buying riskier corporate bonds on the secondary market, perhaps as early as next year, pushed down the euro against the dollar and the yen.
If it happens early next year as some reports suggest, the ECB move could further push down long-term interest rates in the eurozone, which would tend to weaken the currency by denting demand for euro-denominated assets.
"The slippage in the euro-dollar rate was exacerbated by comments from German Finance Minister Wolfgang Schaeuble that a lower euro exchange rate helps the (German) economy," National Australia Bank said in a note.
On Wednesday, traders largely shrugged off Japan's trade balance data, which showed the worst-ever September deficit of ¥958.3bn, putting the world's number-three economy on track for a record annual shortfall.
The monthly result - which was much worse than the market median forecast for a deficit of ¥768bn - comes on the back of a string of weak figures and a sharp economic contraction in the second-quarter that have stoked speculation the Bank of Japan will expand its monetary easing plan and weaken the yen.
The dollar was mixed against other Asia-Pacific currencies.
It strengthened to 44.78 Philippine pesos from 44.76 pesos Tuesday, to 32.31 Thai baht from 32.24 baht, to Sg$1.2707 from Sg$1.2692, to Tw$30.37 from Tw$30.36, and to 12 010.00 Indonesian rupiah from 11 987.00 rupiah.
The greenback weakened to 1 052.77 South Korean won from 1 054.81 won and to 61.22 Indian rupees from 61.28 rupees.
The Australian dollar weakened to 87.88 US cents from 88.21c while the Chinese yuan firmed to ¥17.49 from ¥17.38.
