The yen slipped to a three-week low on Thursday on speculation of more stimulus from Tokyo, while sterling ticked up ahead of a Bank of England meeting that is expected to deliver a rate cut to blunt the economic fallout of Britain's vote to exit the European Union. The dollar extended this week's gain to 105.54 yen, up 1.0 percent on the day and hitting its highest level since late June, as the yen was dogged by speculation that Japanese policy makers could take aggressive monetary easing. Possibly helping to trigger the yen's latest was a story by Bloomberg that former U.S. Federal Reserve Chairman Ben Bernanke had floated the idea of perpetual bonds with one of Prime Minister Shinzo Abe's key advisers in April. The idea under discussion was to make the government issue perpetual bonds directly to the BOJ. With Abenomics widely considered to have failed so far, traders are wondering if the government and BOJ will come up with more radical monetary and fiscal stimulus measures soon. The dollar's rise accelerated after it broke above a major resistance at 105.00 yen, sparking short covering by those who had bet that heavy selling from Japanese exporters would block the currency's advance. Sterling added 0.8 percent to $1.3244, rising off a session low of $1.3105. The BoE is expected to announce a cut to its benchmark interest rate to a record low of 0.25 percent from 0.5 percent when its makes its monthly policy statement at 1100 GMT. Another key focus is how soon the BoE's Monetary Policy Committee could sanction a new round of quantitative easing, said Sue Trinh, senior currency strategist at RBC Capital Markets in Hong Kong. "We're expecting August to be the delivery date, so any kind of guidance on that front will be keenly watched," she said. Wednesday's appointment of Theresa May as Britain's new prime minister alleviated market participants' fears about political chaos in the wake of last month's Brexit vote, and helped sterling climb off its 31-year low of $1.2798 plumbed earlier this month. But many economists say the UK could still slip back into recession. "Even if the BoE passes on a move Thursday, they'll prepare everyone for easing later this year," Kathy Lien, managing director of FX strategy at BK Asset Management in New York, said in a note. "If sterling rises because the Bank of England left interest rates unchanged and some part of the market was disappointed, the rally should be sold," she said. The Canadian dollar, meanwhile, gained against the greenback, which slipped 0.3 percent to C$1.2944. The Bank of Canada held interest rates steady on Wednesday, saying it believed exports and business investment would pick up even as it cut its growth forecast for 2016. The euro rose 0.3 percent to 116.20 yen. Against the dollar, the European currency added 0.2 percent to $1.1106. Waning expectations of the Federal Reserve delivering further interest rate hikes have weighed on the dollar this year, and investors' wariness increased after the Brexit vote roiled markets. Philadelphia Fed President Patrick Marker said late on Wednesday that the central bank will likely opt for a "fairly shallow" series of U.S. interest rate hikes, and that he wants to "let it play out a bit" before backing a policy tightening.