TOKYO: The yen rebounded in Asian trade on Tuesday after suffering weeks of steep declines fuelled by promises from the country's new prime minister to push for more central bank easing.
The dollar weakened to 87.48 yen from 87.89 yen in New York trade, where last week it hit a peak of 88.41 yen, its highest level since mid-July 2010.
The euro also lost ground to 114.83 yen from 115.09 yen, while the single currency bought $1.3125 against $1.3115 ahead of a closely watched European Central Bank (ECB) meeting later this week.
Japan's currency has been under heavy selling pressure since the nation's new leader Shinzo Abe vowed before his successful election last month to push the Bank of Japan for more aggressive monetary easing.
After taking office at the end of December, he repeated that pledge as he centres his first weeks in power on fixing Japan's long-suffering economy.
But Capital Economics said in a note that "we continue to wonder whether this story has much longer to run", and described the BoJ's policies as "already extremely accommodative".
Also Tuesday, Japan's new finance minister said Tokyo would buy bonds issued by Europe's permanent bailout fund to help soothe debt problems in the eurozone -- a major Japanese export market -- and stabilise the yen.
His comments briefly sent the euro and dollar higher against the Japanese unit.
Reports quoting Japanese executives as saying that foreign investors could be scared off if the yen weakens too quickly also had an impact.
The yen hit record highs around 75 against the dollar in late 2011, hurting exporters by making their products less competitive overseas.
Dealers said markets would focus this week on US central banker speeches, after minutes from the most recent US Federal Reserve meeting indicated an earlier than expected end to the current easing.
The minutes sent the dollar surging against the euro and yen.
Markets will also be looking to the ECB meeting, as well as Spanish and Italian bond auctions, dealers said.
Little policy action from the ECB is expected, however, which "could well provide additional support for the single currency", National Australia Bank said. Easing tends to weigh on a national currency.
The dollar was mixed against other Asia-Pacific units.
It fell to Sg$1.2305 from Sg$1.2310 on Monday, to 30.43 Thai baht from 30.46 baht, to 40.87 Philippine pesos from 40.92 pesos, and to 1,063.10 South Korean won from 1,063.76 won.
The greenback rose to 55.32 Indian rupees from 55.00 rupees, to 9,832 Indonesian rupiah from 9,799 rupiah, and to Tw$29.02 from Tw$29.00.
The Australian dollar rose to $1.0480 from $1.0472 while China's yuan was quoted at 14.05 yen from 14.09 yen.
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