Attention is now firmly focused on next week's European Central Bank policy meeting, expected to deliver more policy easing. It comes at a time when the conviction of many that the Bank of Japan would do similarly this summer has been shaken, underpinning the rise for the yen to three-month highs against the euro.
Likewise, while the dollar has gained this week, U.S. Treasury yields have fallen and dealers said there was talk of some substantial fund option bets on the yen strengthening to as little as 98 per dollar over the next month.
Those with "short" positions - or bets that the yen will weaken - have been squeezed by an almost 3-percent march higher for the Japanese currency since early April, driven in part by the fading of expectations for more easing from the BoJ.
The euro has fallen almost 3 percent in the past three weeks, hammered by expectations that the ECB will deliver a substantial blow to pump more cash into the euro zone economy and lower market interest rates.
That move has left the market looking divided, however, on whether the euro can fall any further, whatever the ECB does next week.