By Hiroyuki Kachi 
 

The dollar was slightly higher against the yen in rangebound Asian trade Friday, with weakness in Tokyo stocks weighing on the greenback's upside and moderating gains earlier from dip buying.

Around 0450 GMT, the greenback was trading at Y112.77, compared with Y112.63 late Thursday in New York. The euro was at $1.0581 in midday Asian trade, compared with $1.0583 late Thursday.

The WSJ Dollar Index, a measure of the U.S. dollar against a basket of major currencies, was up 0.02% at 90.77.

Market expectations for the Federal Reserve's early rate increase have receded. The Fed minutes from the previous policy meeting suggested the central bank could raise rates more aggressively this year, and that the next increase could come "fairly soon." But for market watchers the message was not hawkish enough to secure a rate increase at the next policy meeting in March.

"We are seeing expectations are fading," said Shinsuke Sato, head of FX trading at Sumitomo Mitsui Banking Corp.

In the mid morning session, buying from Japanese importers and other corporate players appeared to have kicked in, pushing up the dollar to Y112.96.

But weakness in Tokyo stocks weighed on the dollar's upside as investors bought the perceived safety of the Japanese currency. The Nikkei Stock Average was recently down 0.5% at 19270.51.

However, investors show appetite to buy on dips. Ahead of ahead of the commercial transaction book closing at the end of the month, "we would see [dollar buying] flows," from Japanese players, said Mr. Sato.

Takuya Kanda, senior researcher at Gatame.Com Research Institute, said the dollar's fall below the Y112-threshold provides a good buying opportunity for dip buying. Overnight weakness in the greenback, which sent it back toward Y112.50, may well have been "led mainly by an unwinding of the long-dollar position by short-term players." If so, Mr. Kanda sees the dollar not breaking this month's low of Y111.59.

In other currency trade, the euro gained moderately to Y119.33 midday from Y119.15 late Thursday.

 
Interbank Foreign Exchange Rates At 23:50 EST / 0450 GMT 
 
                           Latest       Previous   %Chg    Daily    Daily   %Chg 
Dollar Rates                               Close            High      Low  12/31 
 
USD/JPY Japan           112.76-77      112.61-62  +0.13   112.96   112.61  -3.62 
EUR/USD Euro            1.0580-83      1.0581-84  -0.01   1.0588   1.0570  +0.59 
GBP/USD U.K.            1.2550-52      1.2554-56  -0.03   1.2561   1.2536  +1.67 
USD/CHF Switzerland     1.0061-65      1.0063-67  -0.02   1.0076   1.0059  -1.24 
USD/CAD Canada         1.3096-101      1.3103-08  -0.05   1.3120   1.3095  -2.55 
AUD/USD Australia       0.7714-18      0.7714-18   0.00   0.7720   0.7699  +7.14 
NZD/USD New Zealand     0.7223-29      0.7227-33  -0.06   0.7238   0.7214  +4.35 
 
Euro Rates 
 
EUR/JPY Japan           119.31-35      119.14-18  +0.14   119.45   119.12  -3.06 
 
 
Source: Tullett Prebon 
 

Write to Hiroyuki Kachi at Hiroyuki.Kachi@wsj.com

(END) Dow Jones Newswires

February 24, 2017 00:22 ET (05:22 GMT)