The yen fell versus the dollar and the euro on Tuesday after China suggested a revaluation of the yuan may be further away than some had expected.
Several officials from the Group of Seven industrialized nations also signaled recently that their forthcoming meeting in February would yield no surprises on currencies.
Some investors had expected the G7 to urge China to revalue its currency and share the burden of the three-year decline in the dollar with Europe. These expectations had led other Asian currencies, such as the yen, to rise in the run-up to the Feb. 4-5 G7 meeting.
"We have had a number of G7 officials come out in the last few days and say they don't see any change in the wording of their communique," said Paul Mackel, currency strategist at ABN AMRO in London.
"So many investors are unwinding short dollar/Asia trades on the view that some had expected more on China and now the G7 may be a non-event. The interview with China today is also another thing. It reasserts China is not ready to revalue."
At 4 a.m. EST the yen traded half a percent weaker on the day at 103.20 yen per dollar and at 134.77 per euro.
Meanwhile, the dollar was trading 0.18 percent weaker from the previous day's close at $1.3070 per euro.