The US dollar retreated against the yen on Thursday as forex traders grew concerned over the ability of the Bank of Japan (BOJ) to weaken the yen with more policy stimulus, while profit-taking and gains in commodity currencies also weighed on the greenback.
The greenback rose against the yen in morning trading on expectations the BOJ could bolster its monetary easing after reports in recent days that the central bank could turn more accommodative.
Doubts over the BOJ's ability to weaken the yen through maneuvers such as steepening the bond yield curve, however, quickly overshadowed those expectations. Traders are also awaiting a Federal Reserve policy meeting on Sept. 20-21, the same dates as the BOJ meeting.
US shares closed sharply higher on Thursday as investors parsed through a series of economic data as the Fed's next meeting draws closer.
USD/JPY fell below 102 to 101.75 overnight after hitting a session high of 102.74 Thursday morning.
The Aussie dollar was up to 0.7526, while the kiwi jumped to 0.7326.
The euro was last down just 0.15 percent against the buck to 1.1230.
