The yen regained some value as it recovered from a three month low against the dollar on Tuesday spurred by economic growth in China that has increased demand for Japanese goods.

This morning the dollar was worth 116.779 yen and 0.7972 euros. The greenback stood at 1.8225 to the pound.

The bank of Japan reports that the world's second largest economy is set to experience its longest period of growth since the Second World War and the largest manufacturers in the country plan to increase investment at the fastest rate for 16 years.

Speaking to Bloomberg, Stephen Koukoulas, chief Asia-Pacific strategist at TD Securities, said: "Demand from the very strong Chinese economy is helping Japanese exporters.

"With China recording solid double-digit growth, this is a very big positive for the Japanese economy and the yen."

Meanwhile, many traders are looking forward to tomorrow's release of US consumer price data for June and the US Federal Reserve's twice-yearly testimony on the economic outlook before Congress.

"The market is certainly focusing on Fed chairman Ben Bernanke's testimony more than the Mideast issue now," a trader at a Japanese Trust bank told Reuters.