Forex - Yen sightly weaker after Feb trade deficit higher than expected

Investing.com - The yen weakened slightly against the dollar on Wednesday after Japan's February trade deficit reached ¥800 billion, wider than the ¥590 billion expected, but narrower than the deficit of ¥2.79 trillion in January.

USD/JPY traded at 101.4, after the data and ahead of a 1030 Tokyo time (0130 GMT), Bank of Japan board member Takahide Kiuchi speech to business leaders in western Japan and BOJ Governor Haruhiko Kuroda is also due to join a Tokyo panel discussion from 1400 to 1715 (0500-0815 GMT).

The Australian dollar remained flat after a private survey showed a downbeat trend for economic expectations.

AUD/USD traded at 0.9126, up 0.02%. Australia's Westpac-MI March leading index fell 0.1%, showing a sharp loss of momentum since February's drop of 0.2% marked the first sub-trend reading since December 2012.

NZD/USD traded at 0.8608, down 0.12%, after New Zealand's fourth quarter current account balance narrowed to a deficit of NZ1.43 billion, from a deficit of NZ$4.88 billion and slightly above an expected NZ$1.41 billion, reflecting strong goods and services trade.

Overnight, the dollar traded mixed to higher against most major currencies on Tuesday after Russian President Vladimir Putin assured the world Moscow is not out to annex Ukraine, while expectations for the Federal Reserve to trim its monthly bond-buying program offset hit-or-miss U.S. housing indicators.

Gold, which trades inversely with the dollar, has been a safe-haven asset class of choice during the crisis, and Putin's calming words enticed investors out of the yellow metal and back into greenback positions a day ahead of the Federal Reserve's March statement on monetary policy.

Elsewhere, The Labor Department on Tuesday reported that the U.S. consumer price index slowed to 1.1% in February from 1.6% in January. Analysts had expected the annual inflation rate to decline to 1.2%.

Month-on-month, U.S. consumer prices rose 0.1% in February, in line with forecasts.

Core inflation rates, which are stripped of volatile food and energy prices, rose 1.6% on year and 0.1% month-on-month, both figures in line with market forecasts.

The Federal Reserve plays close attention to core inflation rates when deciding on monetary policy.

Separately, the Commerce Department reported that the number of building permits issued in the U.S. rose to a four-month high in February, rebounding after a sharp drop in January.

The number of building permits issued last month jumped 7.7% to 1.018 million units, beating market calls for a 1.6% increase..

U.S. housing starts, however, fell 0.2% last month to hit a seasonally adjusted 907,000 units, disappointing expectations for an increase of 3.4% to 910,000 units.

The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, was down 0.01% at 79.53.

On Wednesday, the Federal Reserve is to announce its decision on interest rates and monetary policy followed by a press conference with Janet Yellen, her first as head of the monetary authority.