But the greenback's upside was limited as many exporters were still selling the US unit.

The dollar stood at 77.79 yen in mid-morning trade in Tokyo, edging up from 77.71 yen in New York Tuesday.

The euro was at $1.3024 and 101.31 yen, from $1.3030 and 101.25 yen in New York.

Importers and foreign investors sold the yen after Japan said, as expected, it had logged a calendar-year deficit in goods of 2.49 trillion yen ($32 billion) in 2011, its first since 1980.

Japanese exports slumped due to the economic damage of the March quake-tsunami and the strong yen, while high fuel costs pushed up import bills.

But the US currency's topside was limited, said a senior dealer at a major Japanese bank.

"There are many exporters who are trying to deal forward contracts now, so I don't expect the dollar to rise that much," he told Dow Jones Newswires.

Global market sentiment was still against the dollar, said Emma Lawson, currency strategist at National Australia Bank.

Players also were waiting to hear US President Barack Obama's State of the Union address for news that may affect the markets, such as Washington's policy on Iran and how it might affect oil prices, she said.

Traders also have their eye on the US Federal Reserve's policy board meeting to conclude later Wednesday, she said.