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The dollar pared gains after jumping about 0.3 percent on the day, and was last up about 0.1 percent at 98.33 yen. That was up from a session low of 98.12 yen on the EBS trading platform, though still below its session high of 98.73 touched in the morning.
The Nikkei stock average extended gains to 0.8 percent, although it remained below a session high hit in the morning.
Abe said he had decided to raise the sales tax as planned from April 1 next year to 8 percent from the current 5 percent to sustain the country's public finances.