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Tokyo (ANTARA News) - The dollar slipped in Asian trade on Thursday after the Federal Reserve left the door open to further interest rate cuts after a widely expected quarter point reduction overnight, dealers said.

They said the market was jittery ahead of key US data on employment and manufacturing activity, after first-quarter economic growth came in slightly better than expected at 0.6 percent.

The dollar slipped to 103.69 yen in Tokyo afternoon trade from 103.87 in New York late Wednesday.

The euro firmed to 1.5632 dollars from 1.5623 but slipped to 162.09 yen from 162.25.

Trading was thin with many markets in Asia closed for a public holiday.

Speculators who had expected the Fed to flag an end to its series of interest rate cuts sold the greenback after it left open the possibility of further reductions with a statement expressing concern about both growth and inflation.

"Because there had been speculation prior to the Fed meeting that the US monetary authority would signal an end to the rate cutting cycle, the statement came as a disappointment," Mitsubishi UFJ Securities forex manager Minoru Shioiri told AFP.

The Fed's quarter-point rate cut Wednesday took the federal funds rate to 2.0 percent, the lowest level since November 2004.

The Fed has slashed the benchmark rate by 3.25 percentage points since September in a bid to stimulate sluggish growth amid a prolonged housing slump and credit squeeze.

The Federal Open Market Committee said in its statement that financial markets remained under stress and that there was considerable uncertainty about the inflation outlook.

"Recent information indicates that economic activity remains weak," the FOMC said, but dropped a previous reference to "downside risks to growth".

As the Fed noted continued economic weakness, "market players believe that further rate cuts cannot be ruled out," said Daisuke Uno, chief strategist at Sumitomo Mitsui Banking Corp.

Market participants were looking ahead to Friday's key April labour market report to see how much the mortgage crisis and the ensuing credit crunch has affected one of the US economy's key pillars for growth.

Traders were also waiting for the Institute of Supply Management's (ISM) index of manufacturing activity due out later Wednesday.

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