TOKYO - The dollar edged cautiously higher against the yen and euro in Asia on Wednesday as investors awaited the outcome of the US Federal Reserve's monetary policy meeting, the first under new chair Janet Yellen.
Investors were hoping for some guidance from the bank's new head on her plans for interest rates after the conclusion of the meeting later Wednesday.
Analysts said that the dollar and euro showed resilience amid easing fears that the crisis in Crimea will escalate further.
In Tokyo afternoon trade, the dollar bought 101.55 yen, up from 101.42 yen in New York Tuesday. The euro bought $1.3920 and 141.38 yen compared with $1.3932 and 141.29 yen in US trade.
The yen hardly moved after official data showed Japan ran a trade deficit for the 20th consecutive month in February, although the shortfall was well below a record deficit in January.
Dollar sentiment was hit by data that showed US February consumer prices rose 1.1 percent on-year, well below the Federal Reserve's 2.0 percent target.
"This is more subdued than we expected," Kathy Jones, a fixed-income strategist with Charles Schwab, told Dow Jones Newswires.
Analysts said that the dollar was helped by easing fears over Crimea.
President Vladimir Putin on Tuesday signed a treaty claiming the Black Sea region of Crimea as Russian territory, as Ukraine warned the showdown had entered a "military stage" after soldiers were killed on both sides.
The West condemned Moscow's actions as a blatant annexation of Crimea.
"However in his lengthy speech to the Russian Parliament, Putin indicated he isn't seeking 'a partition of Ukraine', soothing market fears (for now) that the crisis will escalate further," National Australian Bank (NAB) said.
"It gave investors the chance to start focusing on the (Federal Open Market Committee) meeting tonight."
The policy-setting meeting will be the first chaired by Yellen, who is expected to continue gradually tapering the US central bank's stimulus drive as the world's biggest economy improves.
"Janet Yellen will take charge of her first FOMC Meeting as the new Fed chair, with markets widely expecting the Fed to taper by a further US$10 billion (S$12.7 billion) to US$55 billion per month," NAB said.
"But more important will be the signals she gives at her press conference afterwards - in particular any changes to the Fed's forward guidance, as the unemployment rate continues to close in on the 6.5% 'threshold'."
The Fed has said it would keep interest rates low unless unemployment falls below 6.5 percent.