The yen weakened in Asia after G20 finance ministers pledged not to devalue their currencies and avoided targeting Tokyo over the recent plunge in the Japanese unit.
Japan’s policy of monetary easing has led to sharp falls in the value of the yen, sparking fears of a global currency war in which rival nations would drive down their currencies to gain a trade advantage.
In the past few months, the dollar has gained about 17 percent on the yen while the euro has jumped about 25 percent against the Japanese currency, leading to charges that Tokyo is manipulating the unit.
But the Japanese government and the Bank of Japan (BoJ) have denied orchestrating a devaluation of the yen, which weakened Monday to 93.81 against the dollar from 93.53 in New York on Friday.
It also lost ground against the euro, which bought 125.26 yen from 124.97 yen in US trade.
The euro also bought $1.3332 from $1.3360 in New York on Friday.
The G20 statement issued on Saturday said: “We will refrain from competitive devaluation,” adding “we will not target our exchange rates for competitive purposes”.
The pledge echoed a recent statement by the G7 richest nations. Neither named Tokyo as a currency manipulator.
The yen’s return to a weakening trend — after rising before the G20 talks on started — signalled that “exchange rate shifts arising from appropriate domestic monetary and fiscal policies will not be criticised or challenged”, National Australia Bank said in a note.
“But direct reference to currencies as a policy objective will be,” it added.
“We believe this means the yen is free to weaken, but Japanese officials must refrain from being seen to be goading the yen to weaker levels.”
The BoJ, under pressure from Japan’s new conservative government, last month unveiled a plan for unlimited monetary easing and an ambitious target for two percent inflation as part of a bid to beat lingering deflation.
A number of senior Japanese officials have speculated publicly about the yen being over-valued based on its previous stronger levels.
Japan’s efforts sparked charges of manipulation, particularly in Europe, but others have played down currency war fears, with the International Monetary Fund calling such talk “overblown”.
Markets are also watching for the nomination of a new BoJ governor as traders bet that Prime Minister Shinzo Abe will choose a candidate who shares his desire for policy easing.