Escalating tensions between China and the West, as well as potential US tax hikes also hit sentiment and led to investors buying into safe-haven dollar.
The Thomson Reuters/HKEX Global CNH index, which tracks the offshore yuan against a basket of currencies on a daily basis, stood at 96.99, firmer than the previous day's 96.95.
The yen rose against the euro and the antipodean currencies on speculation that Japanese investors who have been buying the lira recently for its high rates will cut losses and close out their positions.
The People's Bank of China (PBOC) set the midpoint rate at 6.5098 per dollar prior to the market open, 239 pips weaker than the previous fix of 6.4859.
Commodity-linked currencies including the Australian dollar , the New Zealand dollar and the Canadian dollar eased slightly against the US dollar, tracking weakness in commodity prices.
The dollar index stood at 91.866, having risen for the last three sessions, drawing support mainly from elevated US bond yields on the back of expectations of a strong economic recovery.
The euro weakened 0.2% to $1.1926 after rising last week for the first time in three weeks as latest data showed hedge funds slashed their net euro positions.
The dollar was little changed at 109.170 yen early in Tuesday's Asian session, after rising as high as 109.365 overnight. The BOJ begins a two-day policy meeting on Thursday, along with an extensive policy review.
Separately, China's central bank rolled over same amount of maturing medium-term loans earlier in the session while keeping the interest rate unchanged for an 11th straight month.
Policymakers have also expressed concern about strength in the euro, although a recent weakening of the currency has lowered expectations about major policy changes.