Increasingly violent clashes between protesters and police in Hong Kong, worries about Britain's exit from the European Union, and Middle East tensions mean risk aversion could quickly flare up again and roil major currencies.
"If we think only about the United States and China, there could be more room for dollar gains and yen losses, but this does not mean trade frictions have been resolved," said Tohru Sasaki, head of Japan markets research at JP Morgan Securities in Tokyo.
"There are still a lot of geopolitical risks, such as Hong Kong, Brexit, and the Iranian situation. I don't expect significant (risk-on) moves."
The dollar fell 0.27% to 106.47 yen.
The Australian dollar also fell 0.3% to 72.33 yen, while the New Zealand dollar fell 0.2% to 72.39 yen.
Against the offshore yuan, the dollar rose 0.2%.
U.S. President Donald Trump on Tuesday backed off his Sept. 1 deadline for 10% tariffs on remaining Chinese imports, delaying duties on cellphones, laptops and other consumer goods, in the hopes of blunting their impact on U.S. holiday sales.
Still, trade negotiations between the United States and China have progressed in fits and starts, so many investors and analysts have scaled back expectations for a resolution in the near term.
The dollar index measuring the greenback against a basket of six currencies was little changed at 97.783 after jumping 0.4% on Tuesday.
The euro was also mostly unchanged, trading at $1.1148.
Hong Kong's airport resumed operations on Wednesday, rescheduling hundreds of flights that had been disrupted over the past two days as protesters clashed with riot police in a deepening crisis in the Chinese-controlled city.
Ten weeks of increasingly violent clashes between police and pro-democracy protesters, angered by a perceived erosion of freedoms, have plunged the Asian financial hub into its worst crisis since it reverted from British to Chinese rule in 1997.
Traders will closely watch Chinese economic data due later on Wednesday to measure the impact of the trade war.
Year-on-year growth in Chinese industrial output and retail sales are expected to slow in July compared to the previous month, according to a Reuters poll of economists. China's government will release the data later on Wednesday.
(Reporting by Stanley White; Editing by Sam Holmes) ((email@example.com; +81 3 6441 1984 twitter.com/stanleywhite1;))