The US currency eased to 100.90 yen in afternoon trade, reversing earlier gains and down from 101.11 yen in New York late Tuesday.

"Falls in (Tokyo) stocks are prompting selling in yen crosses," a senior dealer at a major UK bank in Tokyo told Dow Jones Newswires.

The Nikkei index dipped into negative territory in the afternoon session, closing down 0.39 percent.

The dollar gained overnight in New York ahead of Wednesday's release of the minutes from the June Federal Open Market Committee (FOMC) policy meeting, and a speech by Fed Chairman Ben Bernanke.

Markets have for weeks intensely focused on when the Fed will start tapering its $85 billion-a-month bond-buying programme.

In June, Bernanke signalled the programme would likely be scaled down beginning in the next few months, if economic conditions support it.

The euro was also under pressure following a ratings downgrade by Standard & Poor's of Italy based on its weak economic outlook. S&P has a "negative" outlook on the country.

The euro bought $1.2778, compared with $1.2787, while it also fetched 128.94 yen from 129.29 yen.

The single currency was hit on Wall Street by comments from Jorg Asmussen, a member of the executive board of the European Central Bank, who was quoted as saying the ECB may keep interest rates low for more than a year.

The dollar was mixed against other Asia-Pacific currencies.

It firmed to 60.09 rupees from 60.06 rupees on Tuesday and to 9,981 Indonesian rupiah from 9,980 rupiah.

The greenback fell to Sg$1.2766 from Sg$1.2779, to Tw$30.05 from Tw$30.10 and to 1,136.50 South Korean won from 1,143.60 won.

It also slipped to 31.27 Thai baht from 31.38 baht and to 43.35 Philippine pesos from 43.59 pesos.

The Australian dollar rose to 92.09 US cents from 91.26 cents, while the Chinese yuan changed hands at 16.36 yen against 16.49 yen. (AFP)