The yen sagged against the dollar on Thursday, coming under pressure from news that Japan's public pension fund plans to increase its allocation to the domestic stock market. Separately, the euro held steady above $1.33 as investors digested the European Central Bank's decision to hold fire on interest rates. The dollar rose 0.3 percent to above 102 yen, pulling away from a 1-1/2 week low near 101.76 yen set on Wednesday. It was roughly steady against the euro and just below 11-month highs against a trade-weighted basket of major currencies. All eyes in Europe will be on the European Central Bank's monthly news conference, starting at 830 Eastern, but the action overnight was all about the yen and the Australian dollar. The latter was down almost 1 percent to hit a two-month low after data showed a rise in the Australian jobless rate. The yen, attractive overnight for investors seeking shelter from growing tensions between the West and Russia, weakened as Tokyo shares pushed higher after political sources told Reuters that Japan's Government Pension Investment Fund (GPIF) plans to put over 20 percent of its funds in domestic stocks compared with a current 12 percent target.

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