Investing.com - The yen gained ground against the dollar on Thursday as investors looked ahead to a speech by Federal Reserve Chair Janet Yellen on Friday for indications about whether U.S. interest rates will rise in the near term.
USD/JPY fell to lows of 109.42 and was last at 109.99, down 0.16% for the day.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was down 0.17% to 95.24, moving back from Wednesday’s two-month highs of 95.66.
Investors would be closely watching remarks by Yellen on Friday for clues about whether the central bank could soon hike interest rates.
The dollar has strengthened in recent sessions on the back of upbeat economic reports and comments from some Fed officials indicating that the central bank could raise interest rates at its next policy meeting in June.
Higher rates are positive for the dollar because they make the U.S. currency more attractive to yield-seeking investors.
Investors also remained cautious as G7 leaders held a summit meeting in Japan, amid persistent concerns over the strength of the global economy.
The G7 leaders were expected to reiterate their previous commitment to stability in the foreign exchange market.
The dollar slid lower against the euro, with EUR/USD easing up 0.14% to 1.1169 from Wednesday’s lows of 1.1128.
The single currency was steady against the yen, with EUR/JPY at 122.86 after falling to lows of 122.27 overnight.
The euro remained supported after Greece and its creditors reached a deal to unlock €10 billion in bailout funds and trigger work on debt relief, easing concerns over another euro zone debt crisis.