The dollar continued to decline in early trading on Thursday, as renewed concerns over the outlook for U.S. growth bolstered bets on a big interest rate cut at the Federal Reserve's meeting later this month.
The yen outperformed significantly, partly due to increased demand for safe-haven investments and expectations that an imminent interest rate hike in Japan, coupled with a global monetary easing cycle, will strengthen the Japanese currency by narrowing the interest rate gap.
The yen was last up 0.26 percent at 143.36 per dollar, after rising to a one-month high of 143.20 earlier in the session. The yen has advanced 1.8 percent so far this week.
Global financial markets were on edge, particularly in the United States, where stocks were hit hard after weak data this week renewed concerns that growth in the world's largest economy was not moving as optimistic as expected, and that the labor market was believed to be slowing more sharply than expected.
Data released on Wednesday showed that job openings in the United States fell to their lowest level in three and a half years in July, indicating that the labor market is losing momentum.
The dollar index, which measures the performance of the US currency against a basket of currencies, rose 0.02 percent to 101.28 points.
The euro fell 0.05 percent to $1.1077, while the pound was steady at $1.3146.
The Australian dollar fell 0.02 percent to $0.6724.
Traders are currently betting on a 45 percent chance of a 50 basis point rate cut at the Fed's meeting this month, and they expect cuts of more than 100 basis points by the end of the year.
The New Zealand dollar rose 0.05 percent to $0.6202. The yuan rose 0.2 percent in local trade to $7.1003, hovering near its highest in more than a year.
