The yen rose overnight on reports that the Bank of Japan (BOJ) is planning to increase its oversight of carry trades, which have been crucial to the currency's low dollar rate.

The dollar was down from 118.75 yen in late US trading to 118.60, while the euro was trading at 148.50 yen, down from the record high of 150.73 yen at the end of August.

The BOJ is still concerned about investors borrowing yen to invest in high-yield assets overseas said Japanese paper Nihon Keizai, but the bank played down the report.

Analysts said that parts of the currency exchange had used the report as a pretext to pull back long-dollar positions ahead of a US inflation report yesterday.

"People were a bit surprised," head of foreign exchange at Societe Generale Hidenori Kato told Reuters. "I don't think it'll have another impact on the market."

Yesterday's US economic statistics painted an unclear picture of mixed results with little indication of whether the Federal Reserve would move to cut rates soon.