Investing.com - The dollar dropped to two-week lows against the yen on Wednesday after comments by Bank of Japan Governor Haruhiko Kuroda suggested that the yen may not decline further against the greenback.
USD/JPY fell 1.21% to 122.49, the weakest since May 26 and was last at 122.84, well below the 13-year peaks of 125.84 struck last Friday.
The yen rallied after Kuroda said the real effective exchange rate shows the Japanese currency is "very weak".
The real effective exchange rate measures the yen’s levels relative to the currencies of Japan’s trading partners.
Kuroda also said the dollar may not necessarily rise further against the yen if the Federal Reserve raises interest rates as it is already priced into the market.
The comments came as Kuroda addressed parliament’s financial affairs committee.
The dollar rose to 13-year peaks against the yen on Friday after an above forecast U.S. jobs report underlined expectations that the Fed could start to raise rates at its September meeting.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was down 0.39% to 94.80, pressured lower by the stronger yen.
The euro was also sharply lower against the yen, with EUR/JPY down 0.97% to 138.92.
The single currency pushed higher against the dollar, with EUR/USD up 0.23% to 1.1307 although ongoing uncertainty over Greece held gains in check.
Athens was expected to resume talks on a cash-for-reforms deal with its international lenders later in the day.
Greece’s bailout agreement with the European Union and the International Monetary Fund is set to expire at the end of this month and it cannot make further debt repayments without a new deal.