The euro weakened in Asian trade on Monday following gains late last week on the back of comments from European officials who vowed to support the embattled common currency.
The euro bought $1.2288 in Tokyo afternoon trade against $1.2315 late Friday in New York, while it weakened to 96.27 yen from 96.63 yen.
The dollar rose against the Japanese unit to 78.35 yen from 78.19 yen.
"The euro faced moderate selling pressure as players are adjusting their euro-positions after it topped 1.23 last week," said Yosuke Hosokawa, head of FX sales team of Sumitomo Mitsui Trust Bank.
The euro strengthened Friday on renewed optimism about the eurozone after the leaders of Germany and France on Friday joined the European Central Bank in vowing to protect the currency.
ECB chief Mario Draghi's comments Thursday that the central bank was "ready to do whatever it takes to preserve the euro" sent markets soaring and helped bring down Spain's sky-high borrowing costs.
Draghi's comments were also reinforced by German Chancellor Angela Merkel and Italian prime minister Mario Monti who vowed in a joint statement Sunday to do "everything to protect the eurozone".
But Hosokawa said: "Everybody knows that the euro problem has yet to end.
"The euro is likely to continue to fluctuate on remarks by key officials and other factors for the time being."
Currency markets may see cautious trade ahead of a US Federal Reserve policy setting committee meeting on Wednesday and an ECB meeting in Frankfurt on Thursday, dealers said.
Traders have been eyeing signs that the US central bank will usher in new easing measures to stimulate the world's biggest economy.
Markets were also looking to a July US jobs report due Friday, with expectations that the unemployment rate will be unchanged at 8.2 percent amid sluggish job growth
The dollar was mostly lower against other Asia-Pacific currencies.
It fell to Sg$1.2470 from Sg$1.2517 on Friday, to 55.41 Indian rupees from 55.56 rupees, to 1,137.50 South Korean won from 1,139.68 won, and to Tw$30.03 from Tw$30.08.
The greenback also fell to 41.91 Philippine pesos from 41.93 pesos and to 9,483.00 Indonesian rupiah from 9,485.00 rupiah while holding firm at 31.60 Thai baht.
The Australian dollar edged up to $1.0465 from 1.0462 while the Chinese yuan was at 12.26 yen against 12.24 yen.