The dollar edged higher against the yen on Wednesday, while the euro held firm near a 5-1/2 month high due to receding concerns about the risks posed by the French presidential election.
The dollar rose 0.3 per cent to 111.38 yen, pulling further away from a five-month low of 108.13 yen set on April 17.
Improving risk sentiment on reduced concerns over the French presidential elections helped weigh on the yen.
In a sign of the global bullish sentiment, the Nasdaq Composite hit a record high on Tuesday, while the Dow Jones Industrial Average and S&P 500 brushed against recent peaks, bolstered by strong corporate earnings.
Still, it remains to be see whether the dollar will see a sustained push higher against the yen, said Teppei Ino, analyst for Bank of Tokyo-Mitsubishi UFJ in Singapore.
“It's too early to say that the dollar will keep trending higher and head above the peak it saw in March,” Ino said, referring to the dollar's March 10 high of 115.51 yen.
The focus will be on forthcoming US economic data, especially after a softening in some recent indicators, he added.
The Trump administration's plans for tax reforms are another focal point for markets.
US officials had said late on Tuesday that President Donald Trump is proposing to slash the corporate income tax rate and offer multinational businesses a steep tax break on overseas profits brought into the United States.
Analysts said, however, that there was still uncertainty over just how quickly such fiscal policies would be implemented.
“Just presenting the plan doesn't mean the plan is going to be passed,” said Mitul Kotecha, head of Asia macro strategy for Barclays.
“The reality is any tax changes or tax reforms or tax cuts, may not take place for some time, and Congress at this point is far from being agreed on what shape or form they are going to take,” he added.
The euro edged up 0.2 per cent to $1.0945. It touched a high of $1.0950, matching a 5-1/2 month high that was struck on Tuesday as the market digested centrist candidate Emmanuel Macron's victory in the first round of France's presidential election on Sunday.
In addition, three sources close to the European central Bank's Governing Council told Reuters that with the fading of the threat of a run-off between two eurosceptic candidates in France, and with the economy on its best run in years, many rate setters see scope for sending a small signal in June towards reducing monetary stimulus.
The Australian dollar was last down 0.2 per cent at $0.7524, after underwhelming Australian inflation figures supported expectations of a benign interest rate outlook for months to come.