FOREX-Dollar rally pauses as yen finds support on G7 assurance

The dollar softened on Thursday as traders assessed the U.S. interest rates outlook in the wake of comments from Federal Reserve officials that cemented expectation of monetary settings remaining restrictive for a while longer. The yen, meanwhile, briefly strengthened as Japan's top currency diplomat Masato Kanda said finance leaders of the G7 reaffirmed their stance that excessive currency volatility was undesirable. The greenback has been rising in recent weeks as strong U.S. economic data and persistent inflation dashed expectation of near-term rate cuts.