Investing.com - The dollar rebounded against the yen on Thursday, recovering from the largest one-day decline in six months on Wednesday after comments by Bank of Japan Governor Haruhiko Kuroda sparked a rally in the yen.
USD/JPY was up 0.46% to 123.19, off Wednesday’s lows of 122.45. The dollar ended that session down 1.34%.
The yen rallied on Wednesday after Kuroda suggested that the relative value of the yen may not continue to fall.
Kuroda said the real effective exchange rate showed that the yen's levels were “significantly low".
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 the possibility of rate hikes is already priced into the market.
Against the euro, the dollar was also higher, with EUR/USD easing to 1.1305. EUR/JPY was up 0.27% to 139.31, recovering from Wednesday’s lows of 138.41.
The euro remained under pressure as uncertainty over Greece continued, but hopes for an agreement on a cash-for-reforms deal supported the single currency.
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.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was up 0.22% to 94.79, off Wednesday’s three-week lows of 94.30.