The yen paused after a month-long rally today as comments from China's finance minister dampened speculation that the country was about to revalue its currency.
The Japanese yen has gained alongside other Asian currencies in recent weeks on growing expectations that China would relax controls on the yuan during this week's Labour Day holidays and let the currency strengthen.
The yen hit a six-week high of 104.15 yen to the dollar yesterday but eased after China's finance minister said intense speculation about a yuan rise was making it difficult for China to push forward on currency reform.
Nevertheless, analysts said China's reluctance to let speculators profit from any currency change was well known, and many were advising clients to stay with bullish Asian currency positions for now.
This morning, the yen was little changed from the New York close at 135.40 to the euro and a touch firmer against the dollar at 104.35. Volume was light, with Tokyo closed for a holiday.
One- and three-month yuan non-deliverable forward contracts, derivatives used by speculators to bet on any change in the Chinese currency, also retreated slightly from record highs hit earlier this week.
Speaking on the sidelines of an Asian Development Bank meeting in Istanbul, Chinese Finance Minister Jin Renqing said: "We will actively and prudently push forward this reform but I believe under the current situation that speculation on the renminbi (yuan) exchange rate is very hot and that pushing forward this reform is very difficult."