Yen strengthens in Asian trade

The yen strengthened in Asian trading on Tuesday after tumbling in New York while a US Treasury official praised Japan's recent moves to boost the economy as Tokyo faces claims it is manipulating the unit.

The dollar bought 94.04 yen, from 94.33 yen late Monday in New York, where it had surged more than 2.60 yen.

The euro fetched 125.81 yen on Tuesday, from 126.42 yen in New York, while it also bought $1.3382, compared with $1.3404.

Lael Brainard, who will lead the US delegation to Friday's meeting of the Group of 20 economic powers in Moscow, called on members to "move to market-determined exchange rates and refrain from competitive devaluation".

Brainard reiterated a US call for China -- a frequent target of currency manipulation criticism -- to let the yuan float more freely in the market.

She also welcomed Japan's efforts to boost growth and counter deflation -- which have sent the yen tumbling -- suggesting Washington would not support any criticism of Tokyo at the G20 meeting.

European officials, meanwhile, have warned that the euro was overvalued -- threatening the bloc's exports and economic recovery -- and hinted at market intervention to stem the unit's rise.

Tokyo on Tuesday again rejected claims it was trying to force down the yen, saying the new conservative government's big spending and pressure on the central bank for aggressive easing was designed to stoke growth.

"There is no change in Japan's position," Finance Minister Taro Aso told reporters.

"Japan's new government is carrying out monetary policy and economic policy appropriately in order to pull out of a long-running, deflation-induced downturn. There is nothing more to say."

Japan's finance ministry declined to comment on a report that the Group of Seven leading economies was mulling a joint statement about the dangers of a currency war.

Forex markets were also awaiting a two-day Bank of Japan policy meeting this week as Governor Masaaki Shirakawa prepares to step down about three weeks before the end of his five-year term.

The dollar was largely stronger against other Asia-Pacific currencies, firming to Sg$1.2440 from Sg$1.2398 on Friday, to Tw$29.77 from Tw$29.66, to 53.92 Indian rupees from 53.52 rupees, to 29.88 Thai baht from 29.79 baht, and to 40.70 Philippine pesos from 40.68 pesos.

The greenback slipped to 1,093.00 South Korean won from 1,093.80 won and to 9,636 Indonesian rupiah from 9,678 rupiah.

The Australian dollar weakened to $1.0248 from $1.0284, and China's yuan bought 15.08 yen against 14.97 yen.

Asian forex markets were closed on Monday for a public holiday.