The dollar gained against the euro on Wednesday amid concern the European Parliament elections starting on Thursday may shift the balance of power in the 18-nation region.
The yen reached a three-month high earlier after the Bank of Japan refrained from expanding stimulus.
“You still have to hold on to the longer-term view that dollar-yen will eventually be higher on the ground that in the next six months the Bank of Japan will be easing again, and the Fed’s going in the opposite direction,” Richard Franulovich, chief currency strategist for the northern hemisphere at Westpac Banking Corp in New York, said in a phone interview.
“One thing to look out for in the EU election is Greece – they want to rewrite the austerity package.”
However the bonds of peripheral euro-area nations rose on Wednesday as concern that support for anti-EU politicians would derail the region’s recovery eased.
The average yield to maturity on bonds from Greece, Ireland, Italy, Portugal and Spain climbed to 2.39 percent on Wednesday, up from 2.13 percent on May 8, the lowest since the formation of the currency bloc, according to Bank of America Merrill Lynch indices.