The euro held firm above multi-month lows today as the yen fell victim to profit-taking, failing to capitalise on the rise of the Nikkei stock average to its highest level in more than a year.
The dollar was also unable to advance against the euro despite upbeat US durable goods and consumer confidence figures overnight, and some traders took this to mean the worst for the single currency may be over.
The euro firmed to 127.55 yen up slightly from 127.40 in late New York and up nearly a yen from yesterday's five-month lows.
Against the dollar, the single currency was at $1.0858/63 little changed on the day but almost a cent above yesterday's four-month lows.
The dollar edged up to 117.44 yen compared with 117.29. Traders said wariness about possible Japanese intervention was likely to keep the dollar above 117 yen.
"At these levels, I think you can't deny that the market is becoming cautious about intervention," said Mr Mitsuru Saito, chief economist at UFJ Tsubasa Securities.