The dollar was strong on Wednesday, recouping some losses from renewed bets on the Federal Reserve cutting interest rates this year, while the yen fell for a third day, raising investor concerns about possible intervention by Tokyo.
In European markets, the Swedish currency came under pressure after the central bank cut interest rates, saying it expected two more cuts this year, while the pound remained stuck in negative territory ahead of the Bank of England's meeting on Thursday.
Markets are now focused on the yen, which fell for a third day, prompting Japanese officials to issue a stronger warning about the impact of the currency's weakness on the economy.
Traders believe that the Japanese authorities have pumped about $60 billion in the past few days to support the currency after it recorded its lowest level in 34 years against the dollar at about 160 yen.
Analysts said any intervention from Tokyo would only support the yen temporarily given the wide gap between interest rates in the United States and Japan.
The dollar rose 0.45 percent against the Japanese currency in the latest trading to 155.375 yen, moving away from the lowest level recorded last week at 151.86 yen after doubts about government intervention.
The dollar index, which measures the performance of the US currency against a basket of six major currencies, rose about 0.18 percent to 105.6, above the lowest level in a month recorded last week.
Central banks in Europe have already begun cutting interest rates, including the Swiss National Bank, which made its decision in March before the Swedish central bank moved on Wednesday.
The euro fell 0.12 percent to $1.074, while it rose 0.6 percent against the Swedish krona to 11.752.
The pound fell 0.3 percent to $1.2474.
In cryptocurrencies, Bitcoin fell 1.2 percent to $62,225 and was on track for a fourth day of losses, its longest consecutive losing streak since the start of the year. Ethereum also fell 1.6 percent to below $3,000.
