The dollar fell against the yen in early Monday trading in Asia compared to last week's levels as a rally that had begun earlier in the week subsided.
The dollar was trading at 105.49 yen on the Tokyo foreign exchange market in initial trading, down 0.15 yen from late Thursday and below the 105.74 yen it bought later in New York. Japanese financial markets were closed Friday for a national holiday.
The euro rose to $1.2886 early Monday in Tokyo from $1.2814 late Thursday and to 135.48 yen from 135.34 yen.
In early trading against other regional currencies, the dollar edged up against the Indian rupee and Thai baht but slid against the Singapore dollar.
The dollar has begun a recovery in recent weeks from the plunge it underwent last year on concerns about the massive U.S. trade and budget deficits.
Recently, players are starting to feel Washington may be finally getting serious about curbing spending to bring the deficits under control.
But traders haven't been sure how long the dollar's strength would last, as no one expects a quick fix to the deficit problem.
The greenback's rebound got a major boost last week from comments by U.S. Federal Reserve Chairman Alan Greenspan that played down the dangers of the U.S. current account deficit.
But the dollar suffered a sell-off later in the week after the release of Commerce Department data on the U.S. trade gap.
This week's trading is likely to be a better indicator for the dollar's direction in upcoming sessions, analysts say.