dollar of 82.59 on Thursday, while the yen also hit a 6-1/2-month low of 106.26 yen against the euro.
"Yen, I think, is being driven by anticipation of LDP led government forcing aggressive monetary easing," said Marc Chandler, global head of currency strategy at Brown Brothers Harriman in New York.
Traders said the markets may be capped as activity slows ahead of the U.S. Thanksgiving holiday weekend. Niimura said as hedge funds close their books this month and next, any swing in prices should be seen as more related to their position adjustments than a change in real risk appetite.
GREECE DEAL AWAITED
European shares rose for a third straight session on Wednesday as investors bet on a positive outcome to negotiations over aid to Greece after German Chancellor Angela Merkel said a deal to release emergency aid to Greece was still possible next Monday when euro ministers meet.
The expectations of a Greek deal helped the euro rebound to a two-week high against the dollar of $1.28685, after being initially sold off after international lenders to Greece failed to reach a deal to release the aid on Wednesday.
"Efforts to avert a Greek default may provide short-term relief for the euro, but the measures will only help to buy more time as Greece persistently seeks further external assistance," said David Song, currency analyst at DailyFX, who is maintaining a bearish view on the single currency. Overnight, U.S. stocks ended modestly higher but volume was one of the year's lowest on the day ahead of the U.S. Thanksgiving holiday.U.S. manufacturing grew in November at its quickest pace in five months, with a rise in domestic demand hinting that factories could provide a boost to economic growth in the fourth quarter, while those from Europe are due out later on Thursday.
A ceasefire between Israel and Gaza's Hamas rulers took hold on Thursday after eight days of conflict, easing concerns about supply from oil-producing Middle East.U.S. crude rose 0.3 percent to $87.66 a barrel while Brent inched up 0.2 percent to $111.06.A rallying stock market boosted sentiment in Asian credit markets, tightening the spreads on the