The dollar came off a one-year low against the yen on Thursday as crude oil prices bounced, while the euro awaited a policy decision from the European Central Bank for near-term cues.

The dollar was up 0.4 per cent at 117.41 yen by midday.

It descended to 115.97 overnight, its lowest since January 2015. But a report by Bloomberg quoting an unidentified Tokyo official that authorities were “closely watching the currency markets’’ lifted the greenback, traders said.

Reflationary stimulus policies

Reflationary stimulus policies under Japanese Prime Minister Shinzo Abe have helped to weaken the yen, and authorities are generally seen to be wary towards the currency appreciating excessively.

“That a Japanese official was reportedly prompted to speak on the yen was likely due to the excessive move seen on Wednesday, rather than the fact that dollar/yen fell into the 115 threshold,’’ said Masafumi Yamamoto, chief FX strategist at Mizuho Securities in Tokyo.

The euro dipped 0.1 per cent to $1.0879 after pulling back from an overnight high of $1.0976 following the dollar's surge against the yen. The common currency has gained about 0.2 per cent so far this month.

“Risk aversion related to global issues may result in periods of support for the euro,’’ wrote currency analysts at Credit Suisse.

“Falling oil, however, raise risks that ECB may ease again,’’ they added.

ECB policy meet

The ECB is widely seen keeping all interest rates on hold at Thursday’s policy meeting. But the central bank is also expected to highlight increasing growth and inflation risks, raising the prospect of further policy easing later this year.

The dollar index was up 0.1 per cent at 99.202 after probing a low of 98.626 on Wednesday.

The Australian dollar, battered earlier in the week amid the tumult in global risk assets and commodities, was up 0.2 per cent at $0.6922 following the mild rebound in crude oil prices.

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