The yen extended its rally on Friday on upbeat comments from the head of the Bank of Japan (BOJ), while the euro was squeezed in the crosscurrents.
The US dollar fell to ?116.84 at 10pm GMT against ?117.09 late on Thursday in New York.
The euro fell to US$1.1874 from US$1.1921 on Thursday.
BOJ governor Toshihiko Fukui reiterated hawkish comments about the interest-rate outlook for the world's second-largest economy.
Fukui said Friday that conditions for a monetary-policy change are gradually falling into place.
"In the near term, markets are getting very excited about the idea of the end of quantitative easing, and that's causing the yen to come under some upward pressure," said Lara Rhame, a currency strategist at Credit Suisse First Boston.
Analyst Neil Mellor at the Bank of New York said markets were nearly certain that the Bank of Japan will end its policy of flooding the market with excess liquidity and that speculation is now focused on how soon the central bank will abandon its zero rate policy.
"With the end of the BOJ's quantitative easing policy all but assured over the next few weeks, the markets have taken to pondering phase two of the monetary policy normalization process -- the abandonment of the zero interest rate policy," he said.
The rhetoric from BOJ policy makers over the past few weeks has heightened market expectations that the central bank's plans for change may kick in somewhat swiftly, he added.
Expectations are running high that the BOJ policy meeting that concludes on March 9 will bring about some change.
"The BOJ is nearly ready to embark on a campaign to mop up surplus liquidity in the banking sector," said Steve Pearson at HBOS.
That aside, talk that China may be preparing to let the yuan appreciate further in the face of growing US pressure also helped prop up the yen.
In late New York trade, the US dollar stood at 1.3170 Swiss francs from SF1.3086 on Thursday. The pound was being traded at US1.7456 after US$1.7517 on Thursday.
The US dollar lost NT$0.078 to close at NT$32.492 on the Taipei Foreign Exchange on Friday.