The dollar firmed against a basket of currencies on Friday, as rising expectations of monetary easing by other major central banks offset fading chances of more rate hikes from the Federal Reserve.
The dollar index .DXY =USD, which tracks the greenback against a basket of six major rivals, rose about 0.2 percent to 99.260, below Thursday's more than one-month session high of 99.790. But it was still on track to mark a gain of 0.3 percent for the week.
The dollar edged up about 0.1 percent against the yen to 117.80 JPY=, on track for a weekly gain of about 0.6 percent.
It remained well above Thursday's session low of 115.97, which was its deepest nadir since January 2015, a move that likely did not go unnoticed by policymakers at the Bank of Japan.
The BOJ is likely to cut its core consumer inflation forecast for the coming fiscal year to possibly below 1 percent at a policy review next week, according to three sources familiar with its thinking.
Japan's central bank is "taking a serious look" at expanding its monetary easing measures as sliding oil prices make it harder to reach its 2 percent inflation target, the Nikkei newspaper reported on Friday.
The euro slumped about 0.2 percent against its Japanese counterpart to 127.72 EURJPY=EBS after notching a low of 126.17 on Thursday, its lowest since April.
BOJ Governor Haruhiko Kuroda said on Thursday that he is not thinking of adopting a negative interest rate policy now, signalling that any further monetary easing will likely take the form of an expansion of its current massive asset-buying program.
The euro was down about 0.3 percent at $1.0846 EUR=EBS, poised for a weekly dip of about 0.7 percent, though it managed to bounce off a two-week low of $1.0776 touched in the wake of European Central Bank President Mario Draghi's comments.
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