The Japanese currency gained fresh support in US trading on Thursday following news that President Trump had pulled out of the planned Summit meeting with North Korean leader Kim.
USD/JPY retreated sharply to the 109.00 area before recovering slightly and some conciliatory comments from North Korean officials curbed further yen buying in Asia trading on Friday while Trump stated that the Summit could be reschedules for a later date.
The latest Tokyo inflation data was weaker than expected with a core reading of 0.5% from 0.6% previously, maintaining pressure for a very expansionary Bank of Japan monetary policy.
As risk conditions stabilised, USD/JPY edged back to near 109.50 as the yen lost some traction on the crosses with EUR/JPY just above 128.00.
US 10-year yields, however, were held below the 3.00% level which limited the potential for wider dollar buying as demand for defensive assets remained firm.