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In this paper, the magnet eddy current characteristics of a newly developed variable flux memory machine (VFMM) is investigated. Firstly, the machine structure, non-linear hysteresis characteristics and eddy current modeling of low coercive force magnet are described, respectively. Besides, the PM eddy current behaviors when applying the demagnetizing current pulses are unveiled and investigated. The mismatch of the required demagnetization currents between the cases with or without considering the magnet eddy current is identified. In addition, the influences of the magnet eddy current on the demagnetization effect of VFMM are analyzed. Finally, a prototype is manufactured and tested to verify the theoretical analyses.