The yen weakened against major rivals on Wednesday, hurt by upbeat data on US manufacturing and a view that European currencies were the most resilient to surging oil prices.
Foreign exchange markets have been preoccupied recently with soaring energy costs, which many analysts say could hurt the US economy and delay an expected rise in US interest rates, keeping returns on dollar deposits unattractive.
Analysts say the yen is also susceptible to rising oil prices as a slowing US economy could lead to less demand for Japanese exports.
Such a view pulled down Japanese stock prices on Wednesday, with the key Nikkei stock average ending trade down 0.48 percent.
"It's hard to say which is more vulnerable to higher oil prices - the dollar or the yen," said Koji Fukaya, currency analyst at Bank of Tokyo-Mitsubishi.
"The winner is European currencies. And when looking at the dollar/yen alone, the dollar is a bit stronger due to good US data," he said.
All of which has helped to push down the yen against European units, especially against sterling, dealers said.
The yen fell to a nearly three-month low around 204.50 yen versus sterling before trading at 204.30 down 0.42 percent from late New York trade on Tuesday.
Against the dollar, sterling was up 0.24 percent at $1.8435.
"There are plenty of reasons to buy sterling - (Britain is) an oil-producing country, strong data, and a widely expected additional rate hike this month," said Tomoko Fujii, economic and market analysis director at Nikko Citigroup in Tokyo.
The yen fell as low as 110.92 per dollar before fetching 110.80 per dollar, down 0.27 percent on the day. It was at 135.90 yen per euro, down 0.23 percent.
Against the dollar, the single currency was at $1.2270, up from $1.2240 in late New York trade.