The dollar fell to a three week-low against the yen on Tuesday, retracing most of its gains posted following last week's robust U.S. nonfarm payrolls report, but the decline came as no surprise after five straight weeks of rises.
The dollar on Tuesday posted its worst two-day loss versus the yen since February. The greenback extended losses after New York Federal Reserve President William Dudley said he was less confident that labor market participation will rebound. He added that a stronger dollar could further dampen inflationary pressures.
Yen gains were also boosted by remarks from Bank of Japan Governor Haruhiko Kuroda, who told a news conference there was no need to adjust monetary policy if the Bank of Japan's 2 percent inflation goal can be met in the middle of the financial year starting next April. As a result, the yen not only rose against the dollar but also hit a one-month high versus the euro.