The dollar see-sawed against the yen on Tuesday in erratic trade that saw the US currency spike up earlier on suspected Japanese intervention amid talk Tokyo may consider scaling back yen-selling operations.
By late trade, the dollar was at the day's low around 109.85 yen toying with those in the market who believe Japan was defending the 110 yen level.
Some traders said dollar weakness was due to traders' jitters ahead of Japan's fiscal year-end on March 31.
"People are expecting (the Finance Ministry) to stop or slow intervention in time, and therefore people are getting nervous about that and they're selling dollars," said Jake Moore, associate director at Barclays Bank.
Rising geopolitical concerns stemming from the bombings in Madrid last week also left the dollar slightly down against major rivals.
The euro was at $1.2285/90 versus 1.2265/69 in late New York trade.
The dollar was trading at $1.8065 against sterling about 0.1 percent down from New York levels.
Against the Swiss franc, it was weaker at 1.273 francs, almost 0.2 percent lower on the day.
During morning trade the US currency shot up to around 110.38 yen on suspected yen-selling intervention.
That came in the wake of a Nikkei Financial Daily report on Monday saying the government could end its aggressive intervention policy.
Finance Minister Sadakazu Tanigaki said on Tuesday that Japan had not altered its position that foreign exchange rates should reflect economic fundamentals.
"We are maintaining our policy of taking appropriate action when there are abrupt movements (in the yen)," he said.
Many traders in Tokyo said the Nikkei report, which pushed the dollar down to a two-week low of 109.20 yen in US trade on Monday, contained little that the market wasn't already aware of.
Some believed the government's yen-selling policy would continue even after the fiscal year ended on March 31.
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