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Dollar off 2-1/2 year highs vs. yen, pushes higher vs. euro

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Shutterstock photo - The U.S. dollar pulled away from two-and-a-half-year highs against the yen on Tuesday following remarks by Japan's economy minister and eased back from 11-month lows against the euro.

During European late morning trade, the dollar was sharply lower against the yen, with USD/JPY dropping 0.81% to 88.72.

The yen strengthened broadly after Japan's Economy Minister Akira Amari said Tuesday that a weak yen could have a negative impact on the economy by pushing up import prices.

The yen rebounded against the dollar as the comments sparked profit taking ahead of the Bank of Japan's upcoming policy meeting next week.

The greenback was higher against the euro, with EUR/USD down 0.31% to 1.3342.

Sentiment on the euro was dented after preliminary data showed that Germany's economy contracted by 0.5% in the fourth quarter, bringing the annual rate of growth to 0.7%, a sharp slowdown from 3% growth in 2011.

A separate report showed that the euro zone trade surplus widened to EUR11 billion in November from EUR7.4 billion in October, as exports rose 5%.

The single currency continued to be supported by optimism that the worst of the debt crisis in the region has passed.

The greenback edged higher against the pound, with GBP/USD slipping 0.10% to 1.6060.

In the U.K., official data showed that consumer inflation remained unchanged at 2.7% in December, broadly in line with expectations, as increases in electricity and gas bills were offset by falling fuel costs.

The greenback was higher against the Swiss franc, with USD/CHF rising 0.55% to 0.9269.

The greenback edged higher against its Canadian, Australian and New Zealand counterparts, with USD/CAD adding 0.14% to trade at 0.9851, AUD/USD slipping 0.13% to 1.0548 and NZD/USD dipping 0.04% to 0.8426.

The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, was up 0.14% to 79.61.

Later in the day, the U.S. was to publish government data on retail sales, as well as official data on producer price inflation and manufacturing activity in New York state. - offers an extensive set of professional tools for the Forex, Commodities, Futures and the Stock Market including real-time data streaming, a comprehensive economic calendar, as well as financial news and technical & fundamental analysis by in-house experts.

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