The yen hit a five-year high versus the dollar on Monday as investors bet next month's meeting of Group of Seven industrialised nations could put more pressure on Asian countries to let their currencies rise.
Meanwhile, the dollar held within recent ranges against the euro, some five cents above December's record low versus Europe's single currency, as markets awaited Tuesday's release of U.S. capital flows data.
"People want to buy Asia ahead of the G7 in case China does anything or there is a change of language," said Ian Gunner, head of foreign exchange research at Mellon Bank in London. "And if you want to buy Asia, the yen is a liquid vehicle."
"Overall, the risk on euro/dollar is down this week, but we have the flows data tomorrow and the market will want to see it first and we may even see a move in euro/dollar."
The Japanese currency rose to 101.70 yen per dollar , its highest level since early 2000. At 0855 GMT it was trading at 101.80 yen.
The dollar was virtually unchanged on the day versus the euro, at $1.3118 after its rally in the early days of 2005 lost steam last week.
US markets are closed for Martin Luther King day.