The US Dollar declined for the second consecutive day on Thursday following an unusual cautionary statement from the finance ministers of the US, Japan, and Korea regarding the significant depreciation of other currencies.

The Yen received a slight boost following comments from Japan's top currency diplomat, Masato Kanda, who stated that finance leaders of the G7 reiterated their position that excessive currency volatility was undesirable

Robust US economic data and ongoing inflation have led investors to alter the likelihood of the Federal Reserve slashing rates in the near term, Reuters reports.

The Dollar's safe-haven appeal has been further bolstered by escalating tensions in the Middle East

As a result, other currencies, especially in Asia, have suffered significant losses. The Yen, in particular, has remained close to its 34-year lows, prompting several warnings from Japanese authorities amid concerns among traders about potential intervention.

Furthermore, in their inaugural trilateral finance dialogue on Wednesday, the US, Japan, and South Korea reached an agreement to “consult closely” regarding foreign exchange markets, acknowledging the worries expressed by Tokyo and Seoul regarding the recent pronounced depreciations of their currencies.

“It sends another strong signal to market participants that Japan and Korea are moving closing to stepping into the FX market, while at the same time officials from Japan and Korea will be hoping that the joint statement with the US helps to strengthen the credibility of verbal intervention as well,” said MUFG strategist, Lee Hardman.

The Yen edged up to 153.96 against the Dollar on Thursday, but at the time of writing fell 0.1% to 154.27, close to Tuesday's 34-year low of 154.79.

Elsewhere, the Euro rose 0.1% to $1.068, following the 0.5% gain on Wednesday, and moving away from Tuesday’s five-month low. Whilst Sterling increased 0.1% at $1.2467. 

Additionally, the Dollar index, measuring the greenback against six peers, was down 0.12% at the time of writing, but close to the five and a half-month top reached on Tuesday of 106.51. So far this year the index has risen 4.5%.