The yen traded above 155 per dollar as traders remained cautious ahead of the Bank of Japan's (BoJ) interest rate decision.
Speculation that the Japanese government will intervene has kept the USD/JPY from breaking through the psychological level of 155 recently, according to Reuters.
Markets are now expecting the Bank of Japan to maintain its short-term interest rate target after its meeting on Friday. Earlier, the bank raised the rate from -0.1% to a range of 0 to 0.1%.
Carl Ang of MFS Investment Management said, "We expect a somewhat optimistic outcome from the BoJ meeting".
At the same time, analysts believe that continued expectations of gradual policy tightening and low interest rates are hindering the yen's strength.
The USD/JPY was up 0.19% at 155.64.
Despite the dollar's gains against the yen, the US currency fell against most of the world's currencies.
EUR/USD and GBP/USD rose 0.23% and 0.39% to 1.0722 and 1.2509, respectively, amid upbeat economic data from the Eurozone and the UK.
Risk-sensitive currencies gained momentum as risk appetite improved. Investors expect tensions between Iran and Israel to ease after an Iranian official said the country has no immediate plans to retaliate against Israeli airstrikes.
AUD/USD and NZD/USD rose 0.43% and 0.39% to 0.6525 and 0.5958, respectively.
The Australian dollar is strengthening as a stronger consumer price index reinforces hawkish sentiment on the RBA's monetary policy stance.
The US Dollar Index (DXY), which tracks its performance against the six major currencies, fell 0.20% to 105.6.
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