The yen was down against the dollar as the resignation of Japanese Prime Minister Yukio Hatoyama raised concerns about the outlook for the currency, given that his likely successor has said in the past he wanted a weaker yen.
Analysts said: "concerns about political instability were also weighing on the Japanese currency yen."
Boris Schlossberg, a director of currency research at GFT, in New York said: "Kan is a noted dove who has been an aggressive proponent of a lower yen in order to help stimulate Japanese exports. With the Japanese political situation in state of flux, the dollar may be the only safe-haven instrument left in the currency market for the time being."
The dollar was up 1.2 percent on the day at 92.14 yen, while the euro gained 1.4 percent to 112.81 yen.