TOKYO: The euro was steady in Asian trade on Wednesday, while the yen strengthened against the dollar as the Bank of Japan started a two-day policy meeting.

The euro bought $1.2263 and 97.34 yen in Tokyo afternoon trade, from $1.2251 and 97.26 yen in New York late Tuesday.

The dollar weakened to 79.35 yen from 79.41 yen amid speculation that Japan's central bank will usher in further easing measures to power the world's third-largest economy.

“It's wait-and-see for the dollar/yen with the BOJ decision coming up tomorrow,” Minori Uchida, chief analyst at the Bank of Tokyo-Mitsubishi UFJ, told Dow Jones Newswires.

Dealers were also looking to the release of minutes from a US Federal Reserve meeting due Thursday.

The euro inched up in afternoon trade after it was earlier weighed by comments from Italian Prime Minister Mario Monti who warned the nation's public deficit would be worse than expected this year, stoking speculation about Italy needing to tap a regional rescue fund.

Europe's plans to launch a permanent bailout fund and cement a European fiscal pact faced another roadblock Tuesday, as Germany's top court resisted calls to speed up its decision on whether the fund is compatible with the country's constitution.

“The market was looking for a quick rubber stamp and that wasn't forthcoming,” said Auckland-based HiFX senior trader Stuart Ive.

Traders also digested a deal to offer Spain 30 billion euros ($37 billion) this month to help its distressed banks.

The pact also included an extension of a deadline for Madrid to cut its public deficit to the EU's 3.0 per cent limit by one year to 2014.

The dollar was mixed against other Asia-Pacific currencies.

It eased to Sg$1.2665 from Sg$1.2717 on Tuesday, and to 55.40 Indian rupees from 55.78 rupees while holding steady at 41.89 Philippine pesos, 31.73 Thai baht and Tw$29.94.

The dollar firmed to 1,143.75 South Korean won from 1,143.45 won and to 9,463 Indonesian rupiah from 9,443 rupiah.

The Australian dollar edged up to US$1.0203 from US$1.0168, while the Chinese yuan bought 12.43 yen against 12.49 yen.