The yen jumped to a six-week high against the dollar on Friday after faster-than-expected inflation in Tokyo supported bets for a Bank of Japan interest rate hike next month.

The moves, combined with what traders said was an ebbing in corporate dollar buying once they had satisfied month-end needs, sent the dollar broadly lower and the U.S. dollar index dropped by nearly 0.8% overnight to sit at 106.13.

The dollar started in a cautious mood on Monday in what is shaping up to be a critical week for the prospect of U.S. rate cuts, while the yen's recent rebound was underpinned by wagers on rising rates at home.