They said the yen remained under pressure from a volatile equities market and a scandal touching Japan's central bank governor.

The dollar was little changed at 115.50 yen in Tokyo morning trade from 115.49 late Monday in New York.

The euro eased to 1.2568 dollars from 1.2578 and to 145.10 yen from 145.29. "One of the underlying reasons for the steady dollar is the market view that the Fed will hike interest rates which will eventually rise to 6.00 percent," said Kikuko Takeda, currency research manager at Bank of Tokyo-Mitsubishi UFJ.

The US Federal Reserve meets next week after a series of data showing rising US inflation, cementing expectations of another quarter-point rate hike to 5.25 percent this month.

The latest US warning on inflation came from Atlanta Federal Reserve president Jack Guynn.

"Guynn's speech reinforced the recent hawkish comments from the Federal Reserve and support the now generally held view that the Fed will hike by 25 basis points at the end of the month," Commonwealth Bank of Australia senior economist Michael Workman said in a market note.

"The market has now moved to price in a more than even chance of a follow up rate hike at the August meeting," he said.

The Bank of Japan, meanwhile, last week left in place its near-zero interest rates, as expected, but there is increasing uncertainty as to when this will change since governor Toshihiko Fukui became embroiled in an investment scandal.

Fukui is due to make a speech later Tuesday.

"Factors such as unstable Japanese stocks and the issue around Bank of Japan governor Fukui continued to weigh on the yen," Takeda said.

"I think the Bank of Japan's core consensus, that it would like to normalize its monetary policy when the environment is ready, has not changed.