The yen held a softer tone against the euro and dollar on Monday as investors unwound bets that Asian authorities would let their currencies rise after a meeting of Group of Seven rich nations next week.
Policymakers from the G7 and key emerging economies including China meet in London on February 4-5. European policymakers have been urging Asia, especially China, to let their currencies rise to share the burden of dollar weakness.
But expectations the meeting would succeed in bringing an imminent policy shift in Asia faded after Canadian Prime Minister Paul Martin played down such a prospect at the weekend.
"We have a bit of profit-taking heading into the G7 meeting," said Jim McCormick, head of foreign exchange research at Lehman Brothers.
"Discussions heading into the G7 meeting are very similar to last year. Events centre around China and policymakers are pushing for this burden-sharing argument more towards Asia, but it is hard to imagine what new will come out of G7 meeting."
Canada's Martin said on Sunday he had pressed Chinese officials to free trading in the pegged yuan but acknowledged preparation work needed to be done first.
"I would not advocate a floating exchange rate tomorrow for China," he told reporters in Hong Kong.
By 1230 GMT, the yen was down 0.25 percent at 134.35 per euro . Against the dollar it was slightly down at 102.87 . The euro was up a bit against the dollar at $1.3070 .
"Comments from Canada's prime minister have helped dent speculation that China will do something immediately after the G7," said Paul Mackel, currency strategist at ABN AMRO.

U.S. RATE OUTLOOK
As well as clues on the U.S. interest rate outlook, markets were also looking for details on Washington's plan to tackle the budget deficit -- one factor behind the dollar's three-year fall.
"The market is still undecided where the Fed's policy is going to go. Also, the market is waiting for the U.S. fiscal policy. There are expectations (President George W.) Bush is more serious about tackling the fiscal deficit," McCormick said.
The market is awaiting Bush's State of the Union address and budget presentations in February for more details on the fiscal measures.
Key U.S. data due this week include consumer confidence figures on Tuesday, durable goods orders on Thursday and fourth-quarter gross domestic product data on Friday.
The Fed is expected to raise rates when it meets in February but the question centres on how much more it is expected to tighten going forward.
Also weighing on the dollar was a survey confirming market speculation central banks are changing the composition of their vast currency reserves, mainly to the euro's advantage.
Nearly 40 central banks have increased their exposure to the euro in the past two years, mainly at the expense of the dollar, according to a survey of 65 central banks by Central Banking Publications released on Monday.
European Central Bank chief economist Otmar Issing said the report was "nothing new".