The news sparked demand for the yen that came at the dollar's expense, which pushed the euro up higher as well.
In U.S. trading on Tuesday, EUR/USD was up 0.29% at 1.3443, up from a session low of 1.3365 and off from a high of 1.3475.
The pair was likely to find support at 1.3358, Monday's low, and resistance at 1.3711, the high from Feb. 1.
Earlier, a G7 statement warned member nations not to outright devalue currencies, leaving markets edgy over concerns the yen's weakening trend was taking place too quickly.
"We, the G7 Ministers and Governors, reaffirm our longstanding commitment to market determined exchange rates and to consult closely in regard to actions in foreign exchange markets. We reaffirm that our fiscal and monetary policies have been and will remain oriented towards meeting our respective domestic objectives using domestic instruments, and that we will not target exchange rates," the G7 said on the Bank of England web site.
"We are agreed that excessive volatility and disorderly movements in exchange rates can have adverse implications for economic and financial stability. We will continue to consult closely on exchange markets and cooperate as appropriate."
The statement came ahead of a G20 meeting scheduled to kick off Friday that will likely focus on competitive currency policies.
Japanese Finance Minister Taro Aso insisted on Tuesday that Japan would tell the G20 that it intends to maintain monetary and economic policies aimed at beating deflation and add the country is not out to actively devalue its currency.
Under Prime Minister Shinzo Abe, Japan has taken steps to allow the yen to weaken against other currencies as part of a plan to prioritize economic growth of keeping the consumer price index in a tight target range.
The G7 is expected to express support for a weaker yen provided such a trend isn't the product of an active devaluation.
The news sent the dollar falling as investors snapped up the yen, which sent the euro gaining as well.
Meanwhile in the U.S., the government posted a surprise budget surplus in January.
In a report, the Department of the Treasury said that U.S. federal budget balance rose to a seasonally adjusted USD3.0 billion, from a USD300 million shortfall in December.
Economists were expecting a USD2 billion shortfall in January.
The euro, meanwhile, was up against the pound and down against the yen, with EUR/GBP trading up 0.33% at 0.8588, and EUR/JPY trading down 0.53% at 125.78.
On Wednesday, the eurozone is to produce data on industrial production.
The U.S. is to publish official data on retail sales, the government measure of consumer spending, which accounts for the majority of overall economic activity. The U.S. is also to publish data on import prices, business inventories and crude oil stockpiles.