The yen trimmed gains against the dollar on Friday, but was still on track for its strongest weekly rally in more than two months after Japanese authorities intervened to haul the currency back from near two-year lows.
Japan's Ministry of Finance stepped into the markets Thursday, buying yen as the dollar-yen rate spiked in London trading hours. The yen was at 157.15 per dollar, down 0.35%, but still heading for a 1.4% weekly gain.
Top currency diplomat Atsushi Mimura warned that speculative positions remain, signaling possible further intervention during Japan's Golden Week holidays starting next week.
Analysts say the intervention may have limited impact unless underlying fundamentals shift. The euro edged higher after the European Central Bank signaled readiness to hike rates. The Aussie dollar held near a four-year high.
Oil prices remain elevated amid geopolitical tensions, with Iran threatening retaliation. Japan and other energy-importing nations have seen their currencies slide since late February when U.S.-Israeli strikes on Iran began.
Data showed Japan's core inflation slowed in April but analysts expect price gains to accelerate, keeping pressure on the Bank of Japan to raise rates as early as June.