The Japanese yen was off its lows against the U.S. dollar, with investors disappointed by the Bank of Japan's (BoJ) steps to attack deflationary pressures. Traders said some long dollar/yen positions are likely to be liquidated further. The JPY weakened after the Bank of Japan announced more monetary easing measures to fight deflation and help the ailing economy while holding interest rates at 0.1%.

The Bank of Japan decided at an emergency meeting to make available 10 trillion yen for short-term loans to commercial banks. It also unanimously voted to keep its overnight call-rate target at 0.1%. But despite the Yen's weakness on Tuesday, some analysts said the BOJ moves will not be enough to slow long-term yen buying against the dollar. Many traders expect more Yen strength against the U.S dollar so long as U.S. interest rates also remain essentially at zero too, and that the prospects of yen-weakening intervention by Japan remains low given the Dollar's overall weakness.