The US dollar fell 1% against Japan's yen on Monday, after a US official said Tokyo should continue to refrain from talking down the Japanese currency.
The yen is now at an eight-month high against the dollar
The comments were seen as a signal that the US wishes for the dollar to weaken against both the yen and China's yuan.
Analysts said the US has long argued that Japan and China unfairly benefited from undervalued currencies.
A weaker dollar would help the US cut its trade deficits with the two.
The dollar has fallen sharply since the G7 (Group of Seven) economic powers called two weeks ago for countries with trade surpluses to allow more currency appreciation, singling out China in particular, but Asia in general.
Japan's Finance Minister Sadakazu Tanigaki on Monday declined to respond specifically to the comments of US treasury official Tim Adams, but said Tokyo's stance that exchange rates should reflect economic fundamentals remained unchanged.
"I will not comment on day-to-day movements," said Mr Tanigaki.
He added that Japan's basic stance remained that exchange rates should reflect the economic reality and that excessive volatility was undesirable.
The US dollar fell to 111.23 yen by Monday afternoon in Europe, remaining near an eight-month low.