The U.S. dollar slid for a second day against major peers on Tuesday as receding fears of a full-blown banking crisis sapped demand for the safest assets.
The yen, despite traditionally also being a safe haven, rebounded strongly from overnight losses, with analysts pointing to flows related to the end of the country's fiscal year on Friday.
The risk-sensitive Australian and New Zealand dollars also jumped, with the Aussie getting an additional boost from better-than-expected retail sales data.
The U.S. dollar index =USD - which gauges the currency against six peers, including the yen - declined 0.16% to 102.59 during Asian trading, extending Monday's 0.35% drop.
The greenback plunged as low as 130.505 yen JPY=EBS at one point, and was last off 0.71% at 130.64, undoing the previous session's 0.64% jump, when it tracked a 15-basis point surge in long-term Treasury yields US10YT=RR , the biggest in six months. The 10-year yield was little changed in Tokyo trading on Tuesday at around 3.51%.
"The time of the year - the Japanese fiscal end - I think there are some flows from Japanese repatriating," said Bart Wakabayashi, branch manager at State Street in Tokyo.
"If that's it, it's pretty much a one-off, and then we'll get back to basics, which is essentially following yields."
Kristina Clifton, an analyst at Commonwealth Bank of Australia, wrote in a client note that Japanese banks may seek U.S. dollar funding ahead of Friday.
"USD/JPY can be volatile this week," she said. Meanwhile, the euro EUR=EBS was 0.1% stronger at $1.0809, while sterling GBP=D3 added 0.23% to $1.2315.
The Aussie AUD=D3 rallied 0.53% to $0.6686. New Zealand's kiwi dollar NZD=D3 rose 0.49% to $0.62265.
While the market is taking some solace from regional U.S. lender First Citizens BancShares' agreement to buy all of Silicon Valley Bank's deposits and loans, Wakabayashi says no one is being complacent.
"There is a big cloud - I won't say dark cloud, but definitely a cloud - and I think people are at least positioning for what they need to do if this thing moves in the wrong direction," he said.
"For the moment, dollar is king - dollar is paying interest rates, dollar is safe. Even if it gets sold off, it won't be huge, and it will bounce back."
Elsewhere, bitcoin BTC=BTSP edged down to around $27,000, remaining on the back foot after a 3% slide on Monday, amid problems at the world's biggest cryptocurrency exchange, Binance.
The company and its founder have been sued by the U.S. Commodity Futures Trading Commission (CFTC) for operating what the regulator alleged were an "illegal" exchange and a "sham" compliance program. The exchange also suffered a technical glitch on Monday that forced it to temporarily suspend some operations.
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