The dollar bought 84.74 yen in Tokyo morning trade, a shade lower than 84.82 yen in New York Monday afternoon, after climbing to 85 yen, a level last breached in April 2011.
The euro fetched 111.69 yen and $1.3178 from 111.87 yen and $1.3183 in US trade.
The Japanese currency had dipped against the dollar and the euro on Monday after incoming prime minister Shinzo Abe, whose Liberal Democratic Party won a landslide national election last week, renewed calls on the Bank of Japan to take further steps to ease monetary policy.
Abe at the weekend threatened to change a law guaranteeing the central bank's independence if it did not agree to set a two-percent inflation target as he requested in a bid to drag the country out of the deflation that has haunted its economy for years.
Tokyo markets were closed Monday for a national holiday.
Despite pessimism over divided US lawmakers reaching a deal on the fiscal cliff, dealers said the dollar could see more upward momentum after reaching a 20-month high earlier.
On Thursday, Japan's central bank expanded an asset-buying programme -- its main policy tool -- by 10 trillion yen ($119 billion) to 101 trillion yen, days after the conservative LDP won a weekend election promising to boost spending and pressure the central bank for aggressive action.
With most regional markets closed for a holiday, forex trade was expected to remain quiet on Tuesday.