The yen faced fresh losses on Friday, while bonds were flat as investors put this week's wave of risk aversion behind them, comforted by a relatively neutral statement from the Federal Reserve.
European stocks gave back earlier post-Fed gains as markets eyed U.S. inflation data for clues on the health of the world's biggest economy in the absence of significant company news.
Oil held around $70 a barrel for a third session as the market focused on falling gasoline inventories in the United States and a decline in crude stocks in a key delivery point in the world's top consumer.
The U.S. central bank elected to stand pat on rates at 5.25 percent, as widely expected, extending its steady run to a year. The Fed also reiterated concern over persistent price pressures, suggesting little chance of a near-term interest rate cut.
They've moderated their language to some degree but reading between the lines they remain pretty hawkish, said Paul Mackel, senior currency strategist at HSBC, referring to the Fed's statement.
In currency markets, the Fed statement helped depress implied volatility on options, which in turn emboldened investors to put on carry trades -- selling low-yielding currencies for assets offering higher returns.
As a result, the dollar and euro extended gains versus the low-yielding yen as investors got back into the swing of carry, with dollar/yen and euro/yen both seen on course for fresh multi-year highs.
Stock markets had also taken some comfort from the Fed's stance with Tokyo's Nikkei average booking its highest close in a week, finishing up 206.09 points at 18,138.36.
But the FTSEurofirst 300 (.FTEU3: Quote, Profile, Research) index of top European shares was down 0.2 percent at 1,592.74 points on the last trading day of the first half of the year, after rising earlier to a high of 1,601.80, its peak for the week.
With the company diary light, investors were focused on data releases including U.S. inflation figures and the Chicago purchasing managers' index.
On bond markets, September Bund futures were flat at 110.95.
The focus for investors was now turning to the underlying or core U.S. PCE figures for May at 1230 GMT. Core PCE -- the Fed's preferred measure of inflation -- is expected to rise 0.1 percent on the month, the same as April's rise.
Benign readings like that will probably strengthen the belief in financial markets that the Fed is on hold for some time.
Today's economic data ought to show that the U.S. economy is expanding at a moderate rate. This means there is still no need for the Fed to act, especially since it continues to regard inflation risk as dominant, Commerzbank said in a note.
In a Reuters poll of primary dealers after the Fed's rate decision, 16 out of 17 expected the central bank to stay on hold at its next meeting in August. Nine out of 17 thought the Fed's next move would be a rate cut, while five said it would be a hike.