The safe-haven Japanese yen gained on the dollar on Tuesday, as the market tempered hopes for global monetary easing with worries about its scale and efficacy in combating the economic damage from the coronavirus outbreak. G7 finance ministers and central bank governors hold a conference call later on Tuesday to discuss measures to deal with the outbreak and its widening economic fallout.

The call, which French and Italian sources said begins at 1200 GMT, comes with markets already betting the US Federal Reserve will lead a round of global monetary easing. The dollar fell 0.5% to 107.80 yen and edged lower on the Swiss franc to 0.9576 francs after Reuters reported, citing an unnamed G7 official, that the G7 draft statement had no fresh fiscal or monetary pledges.

"We don't have high expectations that the G7 are going to announce a coordinated policy easing," said CBA currency analyst Joe Capurso by phone from Sydney.

"We see some central banks being reluctant to pull the trigger, like the ECB, for example, and the Bank of Japan, because they just don't have a lot of room to ease." In a statement, expected on Tuesday or Wednesday, the G7 countries will pledge to work together to mitigate damage to their economies, without detailing specifics, a source with knowledge of the draft told Reuters on condition of anonymity.

That leaves investors again confronting fundamentals: The virus and the economic slowdown it is causing will hurt, and the damage may no longer be confined to China-exposed assets. The extra room to respond in the United States, where the Federal Reserve has its benchmark rate between 1.5% and 1.75% compared with zero in Europe, has weighed on the dollar.

But fear has prevented strong gains beyond the euro, which rose as investors unwound carry trades. It last sat at $1.1145, just below its month-high hit overnight. The Australian dollar briefly jumped after the Reserve Bank of Australia (RBA) cut interest rates by only 25 basis points, as anticipated, and not more - which markets had priced as a possibility. But then it fell back to trade just above flat at $0.6549. The New Zealand dollar also gave up intraday gains to sit at $0.6261.