The dollar on Thursday, January 11, rallied and was up as much as 0.4 percent before slipping back to trade 0.2 percent up at 111.69 yen. The U.S. currency is still down more than 1 percent against the yen this week after markets bet the Bank of Japan (BoJ) could start to tighten monetary policy faster than expected.
Against a basket of currencies the dollar turned negative and was down 0.2 percent after earlier trading higher.
Many analysts remain bearish, although some see the dollar’s decline as bottoming out.
“The currency has been testing its lows from the past two years, but the strong economic backdrop should mean it avoids any further depreciation, especially after 2017’s meaningful correction,” wrote Eugene Philalithis, a portfolio manager at Fidelity.
The offshore yuan rate held steady at 6.51 yuan versus the dollar after a volatile week in which the Chinese currency fell sharply on news the central bank had taken a step to loosen control over the exchange rate.