The euro traded in a narrow range against the dollar and yen in Asia Wednesday with sentiment largely driven by speculation over US and European monetary easing.
The single currency bought $1.2397 and 97.36 yen in Tokyo morning trade, compared with $1.2401 and 97.37 yen in New York late Tuesday.
The dollar bought 78.54 yen against 78.59 yen.
"The snoozefest continues," National Bank of Australia said in a note, adding that "risk sentiment remains positive overall, keeping the US dollar under downward pressure".
Markets were largely being driven by growing expectations that policymakers in the US and Europe will usher in further easing measures to boost their respective economies.
That was reinforced by comments from Federal Reserve Bank of Boston president Eric Rosengren on Tuesday that the US central bank should launch an aggressive bond-buying programme to boost the world's biggest economy.
"Overnight, dovish comments from the Fed's Rosengren simply reinforced these (easing) expectations, keeping the risk rally alive," the Australian bank said.
Rosengren is a member of the Fed's policy-setting committee.
The Bank of Japan, meanwhile, started a two-day policy meeting from Wednesday, as Tokyo has voiced concerns about the high value of the yen and hinted at another round of currency intervention to tame the unit's value.
Markets were also looking to an unfolding political drama in Japan over a plan to double the nation's consumption tax to chip away at its massive public debt.
The dollar may get a boost if the opposition Liberal Democratic Party (LDP), which previously agreed to support Prime Minister Yoshihiko Noda's unpopular tax bill, make good on a bid to stall its passage in the upper house of parliament.
"If the LDP takes these moves, we'll have less chance of the tax bills to be passed, which is clearly negative to the nation's efforts to improve fiscal conditions," said Barclays Bank chief currency strategist Masafumi Yamamoto.
-- Dow Jones Newswires contributed to this article --