The greenback had been bought since the Federal Reserve announced Thursday a third round of bond-buying, or quantitative easing (QE3), that stoked speculation the Bank of Japan (BoJ) would follow suit at the end of a two-day meeting Wednesday.
The dollar eased to 78.63 yen in Tokyo afternoon trade from 78.70 yen late Monday in New York.
While a Fed plan to flood markets with dollars would usually have sent the greenback plunging, the unit was supported by expectations of BoJ loosening as well as warnings from Tokyo of market intervention to weaken the Japanese currency.
A poor reading on a key index of manufacturing in New York -- the second straight monthly contraction -- also kept a cloud over the dollar while Japanese exporters were active yen buyers after a three-day weekend in Japan.
The euro bought $1.3099 compared with $1.3114, while trading at 103.00 yen, from 103.22 yen.
"Hopes for more BoJ easing are high, especially among non-Japanese investors," said Hiroshi Maeba, head of FX trading at UBS in Tokyo, told Dow Jones Newswires.
Heightened geopolitical risk stemming from anti-Japanese demonstrations in China over a disputed group of islands in the East China Sea could also weaken the yen, traders said.
"Some investors are already pricing in the next developments in the anti-Japanese rallies, and that could include political chaos," said Yoichi Ito, chief analyst at Sumitomo Mitsui Trust Research Institute.
Against other Asia-Pacific currencies, the US dollar rose to 54.28 Indian rupees from 53.80 rupees on Monday, to 30.88 Thai baht from 30.80 baht, to Tw$29.33 from Tw$29.27, to 1,118.10 South Korea won from 1,114.52 won.
It also firmed to 41.71 Philippine pesos from 41.47 pesos and to Sg$1.2248 from Sg$1.2225.
The dollar eased to 9,492.00 Indonesian rupiah from 9,500.04 rupiah.
China's yuan rose to 12.41 yen from 12.38 yen while the Australian dollar fell to $1.0464 from $1.0529.