The dollar remained weak against the yen, though it stayed well off its overnight lows, after the People's Bank of China made its long-awaited announcement of a revaluation of the yuan. The dollar slumped to a low of 110.17 against the Japanese currency but has since recovered towards the 111 mark on speculation that yesterday's move may have been overdone, as well as fears of possible intervention by the Bank of Japan to ensure the yen does not appreciate too much, analysts said. "The fall in the yen this morning suggests that yesterday's move was an overshoot," said CALYON analyst Mitul Kotecha. The People's Bank of China yesterday announced a 2.1 pct revaluation of the yuan/dollar rate, with the Chinese currency set at 8.11 yuan to the dollar from 8.2765 previously. It also said the decade-old peg of the yuan to the dollar would be replaced by a managed float against a basket of currencies, although details of this are unclear as yet. Meanwhile, the euro fell off highs against both the yen and the dollar. HBOS currency analyst Steve Pearson noted that the euro initially tested the 1.2250-60 usd level in the wake of China's announcement, but fell back as it succumbed to steep declines against the yen just as the dollar was stabilising. This is in line with HBOS' expectation that European currencies will fall faster than the dollar against Asian currencies as the importance of China diminishes the importance of Europe, he said.