China's central bank surprised world markets by taking a step towards a more restrictive economic policy. It created an increase in the Japanese currency while commodity currencies such as the Australian and the New Zealandes dollars fell after traders relaxed short-yen positions.

The US dollar was stable in currency trading accounts on Wednesday while the yen fell broadly as investors concluded China's surprise monetary tightening the previous day would not derail growth, supporting higher-yielding currencies.

Yen paused in its gains on Wednesday after investor closing of long positions in the likes of the dollar, euro and higher yielding currencies appeared to have run its course and the focus shifted to U.S. company earnings.

But yen crosses stabilized on Wednesday after losses in Shanghai's share market from the tightening.  It seemed too contained and investors probably judged that the move would not derail China's growth, traders speculated.