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.