The euro made early gains as investors trimmed record-high short positions, but the single currency struggled to keep those gains as worries about debt-laden Greece simmered in the background.
The euro was steady at $1.3359. It earlier extended its recovery from yesterday's low of $1.3282 hit as concerns about Greece defaulting on its debt intensified.
The yen retreated against the dollar and other major currencies today to cut gains made the previous day on talk that China is likely to allow a modest appreciation in the yuan.
Traders said short-term players sold the yen back to trim positions after pushing it broadly higher as talk on a near-term yuan revaluation intensified to the point that some speculated the move could come before a trip to Washington early next week by China's president.
The yen was also pressured after news that Japanese Prime Minister Yukio Hotoyama and Bank of Japan Governor Masaaki Shirakawa will meet today, helping market views that the government will voice the need for the central bank to take further steps to fight deflation.
The meeting will be the first of regular talks between the government and the BOJ, and comes just two days after the BOJ board decided to hold off on new policy initiatives and gave a slightly more positive view than before on the economy.
The dollar rose 0.1 per cent from late New York trade to 93.53 yen, recovering from yesterday's low of 92.83 yen on trading platform EBS. It was helped by demand from Japanese companies and gains in other currencies versus the yen, traders said. The greenback had pulled back from a seven-month high of 94.78 yen hit on Monday.
Asian currencies are seen likely to gain from any move by China to revalue its currency and the yen is perceived as a major proxy for those regional units.
Reuters