The dollar had already been hit by profit taking by short-term players after it rose above 116 yen for the first time since September 2003 on prospects that the interest rate gap between the United States and Japan would widen even further.
The dollar also sagged against the euro, which helped the single currency climb to a six-month peak versus the yen.
General Motors Corp, the world's largest auto maker, said on Wednesday it had been subpoenaed by the US Securities and Exchange Commission as part of a probe into its accounting practices and other matters. "The GM story is having quite an impact on the dollar at the moment," said Luke Waddington, head of forex trading at Royal Bank of Scotland in Tokyo.
"The market didn't take hold of it yesterday, but it has been given wider release in Asia and has acted as a trigger to turn a market that was not positioned for that sort of news."
The dollar was buying 115.50 yen. It had skidded to around 115.10 yen following its climb to a 25-month high of around 116.25 yen earlier in the session.
The euro was fetching $1.2100, up about 0.3 percent from late US levels. Against the yen, the single currency hovered around 139.75 yen after poking through 140 yen for the first time since April.
The euro climbed as traders covered short positions and on rising expectations the European Central Bank could raise rates next year on a brightening outlook for growth in the euro zone and amid concerns about inflation.
Still, some traders said that talk of a euro zone rate rise would only offer a limited boost to the single currency.