The yen edged higher in Asian trade on Tuesday after tumbling on speculation that the Bank of Japan would launch more easing measures in the face of political demands for policy action.
The dollar bought 84.78 yen in Tokyo afternoon trade, a shade lower than 84.82 yen in New York Monday afternoon, after climbing to just shy of 85 yen, a level last breached in April 2011.
The euro fetched 111.77 yen and $1.3180 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 (LDP) 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, 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 on the yen 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 the 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.
The dollar was mixed against other Asia-Pacific currencies, easing to 1,074.15 South Korean won from 1,075.15 won on Monday, to 54.96 Indian rupees from 55.11 rupees, and to 41.13 Philippine pesos from 41.16 pesos.
The greenback strengthened to 30.63 Thai baht from 30.61 baht, to 9,794 Indonesian rupiah from 9,650 rupiah, and to Sg$1.2215 from Sg$1.2214 while it was unchanged at Tw$29.05.
The Australian dollar bought US$1.0372 from US$1.0403 while China's yuan was quoted at 13.56 yen from 13.53 yen.