Dollar falls to three-month low as Treasury moves to soothe bond jitters

The broad dollar weakness provided some relief to the Japanese yen JPY= as the fragile currency pulled away from the closely watched 160 level. It traded at 158.41 per dollar, surrendering part of its advance from the previous session.

The yen has been in the spotlight since a rare coordinated intervention by U.S. and Japanese authorities at the end of July sought to arrest its slide after it weakened to a 40-year trough near 164 per dollar.

Sterling GBP= rose to $1.3631, its highest in three months, while the Swiss franc CHF= was slightly weaker at 0.7986 per U.S. dollar, after rising by almost 2% in the previous session.

Concern about inflation deepened at the Fed's meeting last month, with several policymakers ready to raise interest rates and many saying a hike in borrowing costs would be needed if inflation did not decline to the U.S. central bank's 2% target, the minutes of the session showed.