A sharp fall in U.S. Treasury yields also undermined the dollar versus the yen, with 10-year yields diving 14 basis points in just two sessions. But traders said expectations that the U.S. labour market was recovering were likely to limit a sharper drop in U.S. yields.
"The key theme of monetary policy divergence remains firmly in place, and I don't see the dollar declining much more against the yen," said Masashi Murata, senior currency strategist at Brown Brothers Harriman in Tokyo.
The euro last traded at $1.1935, not far from the $1.1860 area hit on Monday, a level not seen since early 2006. Constant chatter of a Greek exit from the euro zone further sapped confidence in the currency.
A slide in crude oil prices hurt commodity currencies such as the Norwegian crown, which hit a three-week low of 7.6910 crowns per dollar. Buffeted by a drop in oil prices, the Norwegian currency had slid to a 12-year low of 7.8558 crowns against the dollar in December.
The Canadian dollar was also trading subdued at C$1.1765 per U.S. dollar, not far from a 5-1/2 year low of C$1.1818 struck on Monday.