The dollar was quoted at 91.92 yen after falling to as low as 91.25 in New York trade on an unexpected decline in November pending U.S. homes sales, but remained well below a three-month high of 93.22 yen hit earlier this week.
It was little changed against a basket of major currencies <.DXY>.
Traders said the yen could come under pressure if Finance Minister Hirohisa Fujii were to resign due to poor health, as Japanese media have reported.
That would deal a fresh blow for the government as it struggles with a weak economy and huge public debt, but Japan's stock and government bond markets remained calm.
Fujii's resignation might be expected to lead to a weaker yen, but since this hasn't happened, the stock market is unlikely to respond much at this point either, said Masayoshi Yano, an analyst at Meiwa Securities in Tokyo.
The benchmark Nikkei share index <.N225> edged up 0.5 percent with resource-related shares continuing to rise on the back of a surge in commodity and oil prices since the start of the year.
Oil prices, however, eased 0.2 percent to $81.62 a barrel following an unexpected increase in U.S. oil stocks, after hitting $82 on Tuesday as frigid temperatures continued in parts of the northern hemisphere.
The MSCI index of Asia Pacific stocks traded outside Japan <.MIAPJ0000PUS>, which is trading at 17-month highs, rose 0.5 percent, extending gains over the past few days.
Wall Street gave mixed signals to investors overnight, with the Dow Jones <.DJI> dipping 0.1 percent as upbeat factory order data was offset by concerns about the U.S. housing market following a slump in pending home sales. <.N>
Markets were awaiting December employment data and the minutes from last month's Federal Reserve meeting, due later on Wednesday, for any clues about the health of the U.S. economy and when the Federal Reserve might start to raise interest rates.
Investors are also awaiting key U.S. non-farm payroll data on Friday. If the economy actually added jobs, as a minority of economists predict, it would provide a powerful jolt to what has been a sluggish recovery.
Gold which has see-sawed this week in inverse relation to the dollar, rose to $1,122.80 an ounce from $1,118.10 at the New York close.
The precious metal rallied 25 percent last year as investors bought it as a safe haven and as a hedge against a declining dollar and inflation risk. But it is now well off a record high $1,226.10 on December 3 amid uncertainty about the dollar's direction and on signs the global economy is improving.
Asian currencies continue to benefit from rising risk appetite and South Korean authorities were spotted intervening for a second day to rein in the surging won.
The currency is trading at around 15-month highs as strong economic data in the past week has raised interest rate rise expectations ahead of a central bank meeting on Friday, although many analysts expect the bank to keep rates on hold until later this quarter.
Japanese government bonds edged lower, with the 10-year yield hitting a seven-week high, as caution prevailed about a sale of 10-year debt, the first supply hurdle for the market this year.
There was little immediate reaction to reports that Finance Minister Fujii will quit. Traders said the focus is now shifting to whether his successor can maintain the same kind of fiscal restraint in face of political pressure to spend more on economic stimulus projects, which would further inflate the country's mountain of debt.
(Additional reporting by Elaine Lies in TOKYO; Editing by Kim Coghill)