The Dollar edged down against several currencies on Thursday as investors absorbed US President Donald Trump's latest tariff proposals.

Meanwhile, the Japanese Yen climbed to multi-week highs amid growing expectations of additional rate hikes by the Bank of Japan (BOJ).

The Dollar index, measuring the greenback against major rivals, down 0.2% at 106.92, remained on track for a 0.2% weekly gain, following a 1.2% drop last week.

The Yen, on the other hand, reached a more than two-month high against the Dollar, which dropped 0.8% to 150.27 after briefly dipping below the 150 level.

This movement was largely driven by concerns over Trump's tariffs and traders boosting expectations of further Bank of Japan rate hikes this year, Reuters reports.

Against the Euro, the Yen gained up to 1% and had been on track for its largest daily increase since 27^th January.

On Thursday, BOJ Governor Kazuo Ueda revealed he had met with Japanese Prime Minister Shigeru Ishiba for their regular discussions on the economy and financial markets.

Bank of Singapore currency strategist Moh Siong Sim suggested that the Yen's surge wasn’t due to a single factor, but noted that the news that Ueda and the prime minister had not talked about increases in long-term interest rates may have helped reassure the markets.

“Perhaps that got people excited to think that the recent rise in the yields that supported the Yen wasn't a concern, and therefore it's a green light for more Yen strength and perhaps a BOJ hike quite soon,” he said.

Trump stated on Wednesday he would unveil tariffs within the next month or sooner, including lumber and forest products in his previously announced plans.

Furthermore, Michael Pfister, a currency analyst at Commerzbank, noted that Thursday’s decline in the Dollar was less significant compared to the market reaction when Trump first introduced his tariff plans for Mexico and Canada in January.

“We are seeing a bit of Dollar weakness, but it's not comparable,” he said.

Markets are closely watching geopolitical developments following Trump’s comments on Wednesday, where he labelled Ukrainian President Volodymyr Zelenskiy a dictator, intensifying a feud between the two leaders that has raised concerns among European officials.

Market participants are also evaluating Trump’s remarks, in which he suggested that a new trade deal between the US and China is “possible.” Additionally, Trump mentioned on Wednesday that he anticipates a visit from Chinese President Xi Jinping to the United States, though he did not specify a date.

“Where we are seeing an impact is with the Australian and New Zealand Dollar which have a lot of exposure to Chinese trade," Pfister added.

The Aussie Dollar was up 0.49% at $0.63765 at the time of writing, whilst the New Zealand Dollar rose 0.44% to $0.57300.

Moreover, the Euro was last at 156.805 against the Yen and dropped 0.2% against the Dollar, standing at $1.0426. Meanwhile, Sterling gained 0.21%, reaching $1.26125.