The euro was mixed in Asia Wednesday as fears about the wider implications of the bailout for Cyprus hung over markets, while the yen weakened on expectations for fresh monetary easing by Japan.
The single currency bought 121.72 yen against 121.56 yen in New York late Tuesday, while it also fetched $1.2843, from $1.2856. The dollar sat at 94.83 yen, from 94.55 yen.
The euro's see-saw trade came as the news flow dried up on the situation surrounding Cyprus and its 10-billion-euro bailout, but the unit was pressured by ongoing political uncertainty in Italy.
Sunday night's bailout for Cyprus rescued the island but the levy imposed on savings over 100,000 euros raised concerns it would be used as a template for future rescues, which sent the single currency plunging.
While European officials said Cyprus was a special case, it has not been enough to spur a strong rebound in the euro against the dollar.
Dealers are also keeping an eye on next week's Bank of Japan policy meeting with its new management team widely expected to launch fresh easing measures to bring an end to decades of deflation.
Governor Haruhiko Kuroda repeated a pledge Tuesday that the new-look central bank would do whatever it takes to revive stalled growth in the world's third-largest economy, including bumping the size and scope of asset purchases.
"Absent any major shocks to sentiment stemming from an escalation of the European crisis, we anticipate further yen weakness in the lead up to next week's policy meeting," said Chris Tedder, research analyst at Forex.com in Sydney.
The BoJ and Prime Minister Shinzo Abe's prescription for the Japanese economy -- big spending and aggressive monetary easing -- won more overseas backing Wednesday, this time from Nobel laureate Paul Krugman, also a New York Times columnist.
"You certainly want some US-style quantitative easing. You want large purchases of unconventional assets," he told the leading Nikkei business daily in an interview published Wednesday, referring to Japanese monetary policy.
Last week, Nobel prize-winning economist Joseph Stiglitz called the policy moves "exactly right" after meeting Abe in Tokyo.
The dollar also won support Wednesday from data that showed solid US durable goods orders in February and upbeat housing figures, although weakening consumer confidence weighed on sentiment.
The greenback was mixed against other currencies, firming to 1,109 South Korean won from 1,105 won Tuesday, to Sg$1.2433 from Sg$1.2410, to 41.01 Philippine pesos from 40.95 pesos, to 54.36 Indian rupees from 54.33 rupees, and to Tw$29.87 from Tw$29.84.
But it weakened to 9,731 Indonesian rupiah from 9,750 rupiah and to 29.33 Thai baht from 29.36 baht.
The Australian dollar strengthened to $1.0464 from $1.0462 while the Chinese yuan fetched 15.23 yen against 15.16 yen.