The US decision to hold off from a military attack on Syria also helped risk appetite and led to selling of the safe-haven Japanese currency, traders said.

The dollar gained to 98.60 yen in afternoon Asian trade from 98.16 late Friday in New York.

The euro bought $1.3200, down from $1.3218, while the single currency was trading at 130.14 yen against 129.82 yen.

US President Barack Obama said over the weekend he would first seek authorisation from Congress before undertaking military action against Damascus. Congress is in recess this week and is not due to reconvene until September 9, making military action unlikely this week.

"With the Syrian risk put off for a week, there's almost no need to worry about that for the time being," Hiroshi Maeba, head of FX trading Japan for UBS in Tokyo, told Dow Jones Newswires.