The ascendant yen proved short-lived yesterday as the Japanese currency fell against 16 top-traded currencies as politicians pressured policy makers to maintain ultra-low rates.

The euro was trading at ¥157.86 in early London foreign currency trading from ¥157.29 yesterday, while the dollar was valued at ¥119.95 from ¥119.56.

Analysts said that the yen had the potential to slide as low as ¥121 against the dollar this week as the Bank of Japan (BoJ) begins a two day monetary policy meeting.

"The yen is being sold amid a growing atmosphere of no-rate hike," Seiichiro Muta, director of foreign exchange at UBS AG in Tokyo told Bloomberg.

"Even if the BoJ does it, there will be no additional rate hike for a long time. The yen will remain weak, as long as we have no clear image of the next move after that."

Japan's finance minister insisted that rate setting is the BoJ's territory but pointedly added that consumer spending remains flat.