The dollar rose to its highest level in 13 years against the yen on
Thursday, boosted by expectations that the economic recovery in the U.S.
would accelerate the timeline for higher interest rates.
USD/JPY touched 124.30, the most since June 2002 and was last at 123.72.
Economic data published last week, including reports on inflation, new home sales, business investment and consumer confidence all signaled the U.S. economy is gaining momentum after a slowdown in the first quarter.
Hopes for the economic rebound spurred renewed expectations that the Federal Reserve will begin to hike interest rates around September.
Meanwhile, many investors wait for the Bank of Japan to take additional easing steps later this year, when the Fed is expected to start raising rates.
"Longer term, little stands in the way of further JPY losses," said Greg Moore, senior currency strategist at RBC in Sydney.
The euro edged higher against the dollar, with EUR/USD at 1.0940, still not far from Wednesday’s one-month trough of 1.0818.
The euro recovered after Wednesday's losses after the Greek government said it had started drafting an agreement with its international partners, signaling progress in long-running negotiations to unlock more financial aid.
However, European officials played down suggestions of a deal, saying negotiators still had much work to do before reaching an agreement.
In the stock market, Australia's S&P/ASX 200 index dipped 0.2 percent after weaker than expected business spending data suggested that rate cuts were failing to stimulate the economy as hoped.
Japan's Nikkei, however, was higher ending up 0.4 percent, refreshing a 15-year closing high, as the weaker yen helped the index register its 10th consecutive rise, the longest winning streak since February 1988.
MSCI's broadest index of Asia-Pacific shares outside Japan shed about 0.8 percent, extending losses in afternoon trading as Chinese and Hong Kong shares plunged as a growing number of brokerages tightened requirements on the margin financing.
The CSI300 index of the largest listed companies in Shanghai and Shenzhen tumbled 3.2 percent, while the Shanghai Composite Index lost 2.8 percent. Hong Kong's Hang Seng index shed 2 percent.
