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The yen rose in Asian trade Wednesday after the Group of Seven (G7) richest nations issued a warning over currency manipulation, as Tokyo faces claims it has orchestrated a slide in the yen.
The dollar bought 92.85 yen in Tokyo, down from 93.47 yen in New York on Tuesday, while the euro fetched 124.85 yen, from 125.75 yen. The single currency slipped to $1.3444 from $1.3454.
The yen, which has sharply declined in recent months on the back of aggressive easing rhetoric from Japan's new government, is well up from Tuesday morning's levels above 94 to the dollar and more than 126 to the euro.
The G7 declared Tuesday that excessive turbulence in exchange markets hurts financial stability, and said rates should be set by the market.
"We, the G7 ministers and governors, reaffirm our longstanding commitment to market determined exchange rates and to consult closely in regard to actions in foreign exchange markets," a brief statement said Tuesday.
The group added that members would keep fiscal and monetary policy limited to meeting "our respective domestic objectives" and "not target exchange rates".
The comments come just days before G20 talks in Moscow where lawmakers will discuss growing fears of a currency war in which nations carry out devaluations to make their exports more competitive.
Markets will also be watching a two-day Bank of Japan (BoJ) policy meeting, which wraps up Thursday, and whether policymakers unveil fresh easing measures.
"The Japanese yen remains subject to the headwinds from the Bank of Japan's anticipated shift to a more aggressive easing policy," National Australia Bank said in a note, describing the G7 statement as a "shot across Japan's bows".
Barclays Securities Japan chief rates strategist Chotaro Morita said the G7 comments could impact "future BoJ policy decisions at some level".
The explicit mention of fiscal and monetary policy appeared to target Japan, and "could make it difficult for the BoJ not only to buy foreign bonds but also to conduct monetary easing in other ways that clearly impact exchange rates," Morita added.
The dollar was largely lower against other Asia-Pacific currencies, falling to Sg$1.2379 from Sg$1.2440 on Tuesday, to Tw$29.72 from Tw$29.77, to 53.82 Indian rupees from 53.92 rupees and to 29.82 Thai baht from 29.88 baht.
The Australian dollar rose to $1.0344 from $1.0248 while China's yuan sank to 14.91 yen from 15.08 yen.
-- Dow Jones Newswires contributed to this article --