On Tuesday the Australian dollar rose, as the Reserve Bank of Australia held the cash rate steady at 2.25%, a record low, but signalled it might move to cut further to spur growth.
AUD/USD traded at 0.7817, up 0.66%, while USD/JPY changed hands at 119.63, down 0.42%.
"At today’s meeting the Board judged that, having eased monetary policy at the previous meeting, it was appropriate to hold interest rates steady for the time being. Further easing of policy may be appropriate over the period ahead, in order to foster sustainable growth in demand and inflation consistent with the target," a statement said.
"The Board will further assess the case for such action at forthcoming meetings."
Australia's fourth quarter current account balance indicated a deficit of A$9.6 billion, narrower than the A$11 billion expected. January building approvals jumped 7.9%, well above the expected fall of 1.8% month-on-month.
Japan said January preliminary wages rose 1.3% year-on-year, well above the 0.6% gain expected and the 11th straight rise.
On Monday the dollar extended gains against a basket of other major currencies, even after data showed that U.S. manufacturing activity expanded at the slowest pace in 13 months in February, as an upbeat U.S. growth report published on Friday continued to support.
The Institute for Supply Management said in a report its index of purchasing managers fell to 52.9 last month from a reading of 53.5 in January. Analysts had expected the manufacturing PMI to decline to 53.0 in February.
Separately, the Commerce Department reported that U.S. consumer spending slid 0.2% in February after falling 0.3% in the previous month. Economists had forecast a 0.1% decline.
The dollar remained supported after the Commerce Department reported on Friday that U.S. gross domestic product grew at an annual rate of 2.2% in the last three months of 2014, down from an initial estimate of 2.6% but ahead of expectations for a downward revision to 2.1% growth.
