The yen advanced against the dollar and euro for a second straight session on Wednesday as a recent warning from a Japanese official about excessive yen weakness continued to underpin the currency.
The euro, meanwhile, slipped for a second consecutive day against the dollar on persistent concerns about the region's economy.
Europe's shared currency briefly bounced after European Central Bank member Ewald Nowotny said the euro's exchange rate was "not a matter of major concern." That was in stark contrast to comments from Eurogroup head Jean-Claude Juncker, who on Tuesday prompted investors to sell the euro by saying it was "dangerously high."
The focus, however, remained squarely on the yen, which has captured investors' attention the last two months. Forecasts of aggressive action by the Bank of Japan to weaken its currency drove the dollar sharply higher in recent months, with the greenback gaining nearly 11.3 percent in the fourth quarter of 2012 and 2.1 percent so far this year.
However, after the yen hit a 2 1/2-year low of 89.67 this week, most believe it was poised to recoup losses, with a correction ignited by Japanese Economics Minister Akira Amari's comments on Tuesday. Amari cautioned that excessive yen weakness could boost import prices and hurt people's livelihoods.
"People are still looking for further yen weakness, but there has been a pullback in yen selling obviously due to Amari's comments," said Brian Kim, currency strategist, at RBS Securities in Stamford, Conn. "Investors haven't really seen hard decisions from the Japanese government about weakening the yen, so there are some questions there."