The dollar slid sharply to its lowest for three months against the yen and seven months versus the euro on Monday after the Group of Seven said at its weekend meeting in Washington that China should let its yuan currency appreciate as a way of fixing global imbalances. The yen climbed around one percent against the dollar and the euro, which gained additional support as comments from Qatar and Russia added to speculation that central banks are shifting their reserves away from the dollar. However, the yen's rally stalled slightly after Japan signalled its displeasure at the rapid move when Vice Finance Minister Koichi Hosokawa said he was watching forex moves with "strong interest" and would always take appropriate action on forex as needed. "The G7 meeting highlighted the dollar's vulnerability to concerns about global imbalances," Bank of America currency strategist Kamal Sharma said. Finance ministers of the world's biggest economies called for major exporting nations to allow their currencies to rise against the dollar to help resolve the imbalances, highlighted by the massive U.S. trade deficit and China's large surplus. "This is the fist time since 2003 that G7 has bought in new language with significant implications for the foreign exchange market. It shows the importance they attach to global imbalances...and the urgency among policymakers to deal with this issue," said David Woo, head of currency research at Barclays Capital. But some analysts said the effect on the dollar may be limited as Chinese officials have made clear they will reform the yuan at their own pace and the G7 stopped short of laying out concrete action to tackle trade imbalances. The dollar had fallen over one percent to as low as 114.87 yen -- the lowest since January before stabilising around 115.14 yen after Hosokawa's comments. The euro slid to 142.33 yen, well away from a record high of 145.51 struck last week. Against the greenback, the euro hit a fresh seven-month peak at $1.2409 , before easing back to $1.2380. European Central Bank President Jean-Claude Trichet gives a talk at the Council on Foreign Relations in New York at 2200 GMT.