Yen awaits BOJ verdict, GDP data also eyed

Markets were also waiting for Japan's fourth quarter gross domestic product (GDP) data due 2350 GMT, with forecasts centring on meagre growth of 0.1 percent in the quarter. Any downside surprise could add pressure on the BOJ to act sooner.

Volatility wasn't only confined to the yen. The euro also saw a bit of action against the greenback, first rising to a one-week high of $1.3520, before quickly relinquishing those gains to last stand at $1.3451.

Resistance is seen around $1.3530, the 50 percent retracement level of its Feb 1-11 fall.

Initially supporting the euro, data on Wednesday showed output at euro zone factories rose for the first time since August at the end of last year, a sign the single currency bloc was slowly starting to pull out of recession.

Sterling took a bit of a pounding after the Bank of England said Britain faced years of meagre economic growth and left the door open for yet more stimulus.

It struggled near a six-month trough around $1.5523 and plumbed a record low against the New Zealand dollar at NZ$1.8344.

Commodity currencies fared well with the Australian dollar rising to $1.0367, putting a four-month trough of $1.0227 plumbed on Tuesday well and truly in the rear-view mirror.

The bounce in the Aussie has also snapped a series of lower lows and lower highs in the charts, hallmarks of a downtrend after the Reserve Bank of Australia left the door open to more rate cuts early last week.

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