Tokyo: The dollar hovered near a 17-month low against the yen on Wednesday after taking a fresh knock overnight on comments by Japan`s prime minister which suggested the authorities were cautious towards arresting the yen`s appreciation.

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The U.S. currency traded little changed at 110.300 yen after falling to 109.92 late on Tuesday, its lowest since Oct. 31, 2014.

Japanese Prime Minister Shinzo Abe told the Wall Street Journal that countries should avoid seeking to weaken their currencies with "arbitrary intervention."

Amid earlier turmoil in the global markets the yen has advanced steadily this year due to its safe-haven status and more recently on expectations that the Federal Reserve would not hike interest rates as aggressively this year as initially anticipated.

But each significant advance had been accompanied by some wariness in the market that Japan could intervene to prevent a stronger yen, which is an unwelcome factor for a government trying to shore up a moribund economy.

"Japan will host the G7 summit in May. It cannot afford to invite almost guaranteed criticism by intervening through yen-selling after it adopted negative interest rates," said Junichi Ishikawa, FX analyst at IG Securities in Tokyo.

The Bank of Japan adopted negative interest rates late in January, but the shock move did little to weaken the yen.

"The authorities also have to keep U.S. political developments in mind, as presidential hopefuls Trump and Clinton have both been critical of Japan`s stance on currencies," Ishikawa added.

Even without the Japanese prime minister`s comments, the yen was on a strong footing thanks to a slip in global stock markets and lower U.S. Treasury yields, which lessens support for the dollar.

The dollar`s sharp fall against the yen enabled to euro in turn to stay firm against the U.S. currency despite data showing a drop in German factory orders and a subdued start to the euro zone`s business activity in the first quarter.

The common currency was nearly flat at $1.1383 after probing a low of $1.1335 overnight.

The euro managed to touch a 5-1/2-month high of $1.1438 last Friday after U.S. central bank chair Janet Yellen indicated she was in no hurry to tighten monetary policy last week.

The Australian dollar was on the defensive, trading little changed at $0.7544 after losing 0.7 percent overnight. The Aussie has been hurt this week by a dent in global risk appetite and slide in commodity prices.