The U.S. dollar gained against the euro and the yen after the Federal Reserve left the federal funds rates unchanged on Wednesday.
The U.S. dollar hit last session hits of $1.0964 against the euro.
Earlier, the weakened against the dollar on Wednesday after Japan's prime minister unveiled a surprisingly large $265 billion stimulus package to reflate the world's third-largest economy, and before the Federal Reserve was due to make a statement on its two-day meeting.
The size of the Japanese package, at more than 28 trillion yen ($265.30 billion), exceeded initial estimates of around 20 trillion yen.
It will also add pressure on the Bank of Japan to match the measures with monetary stimulus when it concludes its meeting on Friday.
"We have some headlines that the stimulus could be a little bit higher than people had been anticipating, and that's been dovetailing with what the expectations are around the BOJ," said Mark McCormick, North American head of fx strategy at TD Securities in Toronto.
Japan's Ministry of Finance also denied a report by the Wall Street Journal on Wednesday that it is considering issuing 50-year bonds for the first time to capitalize on ultra-low interest rates.
"We have had a lot of volatility driven by the different reports this morning," Commerzbank currency strategist Thu Lan Nguyen said.
"The bigger issue for the market is how this program is going to be financed. So far it looks like the Bank of Japan is not ready to do something new and that leaves the potential for more downside for the dollar before the meeting on Friday," Nguyen said.
After falling more than 1 percent in Asian trading, the Ministry of Finance's denial on the bond issue helped the yen recover. The dollar last rose 0.53 percent to 105.40 yen per dollar.
The prospect of more stimulus in Japan has overshadowed the Fed meeting, where the U.S. central bank was expected to leave interest rates unchanged.
Positive economic data has increased expectations that the Fed will raise rates in December, though some traders and analysts think the Fed could indicate on Wednesday that a September hike is possible.
The dollar pared gains against the yen and the euro after data showed that new orders for U.S. manufactured capital goods rose modestly in June, but weak demand for machinery and a range of other goods suggested business spending will remain subdued for a while.
The dollar index, which tracks the currency against a basket of six major rivals, gained 0.30 percent to 96.85.