Yu Yongding, head of the Institute of World Economics and Politics at the Chinese Academy of Social Sciences, said further appreciation of the yuan was inevitable in the long run, but that any changes were likely to be gradual.
Speculation of another yuan policy change reminded investors of a yuan revaluation on July 21, when traders chased the yen two percent higher due to its proxy status for the region.
Analysts say Yu's comments come at a time when the dollar failed to break a key option-related technical resistance of 116 yen, prompting traders to close their stale long positions.
"The yen is up overall but it is the correction of Friday's losses, not only against the dollar but on the crosses," said Hidetoshi Honda, currency strategist at Mizuho Corporate Bank in London.
"Above 116, option-related stop-loss is lurking and the failure to break that level triggered short-covering in the yen. Yuan speculation is a factor but it was used as an excuse."
At 1130 GMT the yen traded a quarter percent up on the day at 115.62 per dollar. It earlier traded as low as 115.97 yen, close to last week's two-year trough.
The yen also rose against the British pound, after hitting a 1-1/2 year low of 205.59 on Friday.
The Japanese currency had been struggling in recent weeks as Japanese investors, frustrated with near-zero interest rates at home, bought high-yielding foreign bonds.
The euro was steady against the dollar at $1.1943, and 0.2 percent down at 138.15 yen.
In July, China scrapped its dollar peg and adopted a managed float that in theory allows the yuan to rise or fall by 0.3 percent a day against the dollar. But Washington believes the yuan remains undervalued given China's ballooning balance-of-payments surplus and wants the currency, also known as the renminbi, to rise faster.
Yu said China's economy was showing signs of cooling down, or stabilising, but strong growth would likely continue for the next decade.
Japan's top financial diplomat, Hiroshi Watanabe, said a "trial period" for China's yuan currency reform was over and it should now allow more flexibility. Elsewhere the dollar remained firmly supported as investors bet on steady rises in US interest rates.