The Bloomberg Dollar Spot Index was little changed at 1,203.15 on Friday, and the dollar was still headed for its best weekly performance since June. According to Sina Finance, the yen narrowed its losses after reports that the Bank of Japan had sounded out market participants on exchange rates.

Dollar/yen rose 0.5% to 156.75. The yen had fallen sharply earlier after the Bank of Japan raised interest rates as expected but gave no clear guidance on whether borrowing costs would be increased further.

Geoffrey Yu, senior strategist at BNY Mellon, said the market may think the Bank of Japan was not hawkish enough, which helped drive the rebound in dollar/yen. He added that investors will watch whether officials signal to the market to defend the effectiveness and credibility of recent foreign-exchange action.

The yen was the worst-performing G10 currency against the dollar on Friday and for the week. Sterling rose 0.2% to 1.3389 against the dollar, while the euro gained 0.1% to 1.1483.

A gauge of French government bond risk rose 1 percentage point, reflecting growing investor caution amid France's large budget deficit and continued political uncertainty.