The U.S. dollar fell below 108 yen for the first time in 17 months on Thursday on continued expectations the Bank of Japan was unlikely to intervene, while the euro fell against the dollar on the potential for a more dovish European Central Bank.
The dollar fell more than 1.6 percent against the yen to 107.94 yen, its lowest level since late October 2014. Analysts said the BOJ was not indicating it would step in to halt the yen's rally.
"The rhetoric from BOJ officials has been more relaxed than what investors anticipated," said Kathy Lien, managing director at BK Asset Management in New York.
BOJ Governor Haruhiko Kuroda said in a quarterly meeting of BOJ branch managers the central bank was ready to take additional monetary easing steps if needed to hit the bank's 2 percent inflation target.
But he also said Japan's economy continues to recover moderately as a trend, and the head of the BOJ's Nagoya branch said Japanese automobile exports remain strong with no big damage seen from the yen's recent rises.
The market is skeptical about the chances of yen-selling intervention ahead of a G7 summit that Japan is hosting in May, analysts said, while doubts remained over how effective further BOJ easing would be.
The euro fell against the dollar from $1.1453, its highest level in nearly six months, to a session low of $1.1338. It was last down 0.17 percent at $1.138.
Investors may be positioning for the possibility of a more dovish stance from the European Central Bank given the euro's recent strength, said Omer Esiner, chief market analyst at Commonwealth Foreign Exchange in Washington.
"(The ECB) can't be happy with the euro's performance now close to $1.15," Esiner said. "That may suggest that the ECB may want to kind of step up its dovishness."
The ECB targets inflation just below 2 percent, but flash data recently showed it was -0.1 percent in March. In addition, there are few signs the ECB's latest round of stimulus has had much impact on growth.
The U.S. dollar index, which measures the greenback against a basket of six major currencies, was last up 0.1 percent at 94.52, up from an earlier nearly six-month low of 94.015 .