Rising worries on Tuesday helped crimp some of the dollar's losses through safe-haven flows, with the dollar index =USD, which measures the U.S. currency against its peers, trading 0.1% higher at 99.62.
The Japanese yen JPY=EBS was a touch weaker at 159.70 per dollar, having erased nearly half of the gains from the joint U.S. and Japan intervention at the end of July to lift the fragile yen away from a 40-year low of 163.99.
Traders are focused on the threat of more intervention as well as the Bank of Japan meeting next month, where the central bank is set to raise interest rates and is considering hiking more aggressively after that, sources told Reuters.
Meanwhile, bond yields around the world were on the rise again, partly due to traders' concerns about the impact on energy prices of a prolonged closure of the Strait of Hormuz.
Brent crude futures LCOc1 rose 0.2% to $91.10 a barrel, touching their firmest levels since July 30.
U.S. 30-year Treasury yields US30YT=RR rose to their highest level since 2007, while yields around the world moved higher. Yields move inversely to prices.
"Bond traders appear more concerned about the longer-term inflation outlook than currency traders at present," said Matt Simpson, senior markets analyst at StoneX.
"If bond markets are right — and they have an annoying tendency to be — the U.S. dollar's pullback may prove short lived."
The spotlight has also been on recent U.S. Treasury auctions for the multi-decade yields demanded by investors to absorb Washington's borrowing needs.
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