Asian stock/AFP
The Japanese yen has tumbled more than 10 percent against the dollar this year. AFP

The yen edged back Thursday following another surge against the dollar that fuelled speculation Japanese authorities had intervened for a second time this week, after Federal Reserve boss Jerome Powell warned interest rates would stay higher for longer.

Powell's remarks, however, were tempered by his assurance that borrowing costs would not likely be hiked again, soothing worries in some quarters that the bank's battle to bring inflation back to its two percent target would need to be stepped up.

While US traders were spooked by the prospect that rate cuts were still some time off, analysts said the Fed had been less hawkish than feared.

The Fed also said it would slow down the pace at which it shrinks its balance sheet -- having bought up vast amounts of bonds previously to keep rates low -- which eased upward pressure on Treasury yields.

The comments came after a string of data at the start of the year saw inflation come in above expectations, while the economy and labour market remain in rude health.

"The statement and news conference should not come as a surprise to investors," said Tai Hui at JP Morgan Asset Management.

"Recent Fed speech has acknowledged the lack of progress on inflation and the desire to maintain the current level of policy rates for longer.

That said, it does seem clear the committee remains biased to cut rates, but any policy easing will be determined by how inflation develops over the next few months," he added.

"While inflation seems sticky, it's not 'sticking' at a level that is causing a surge in wages, eroding consumption, or lifting inflation expectations, comfortably putting stagflation fears to rest."

Soon after the announcement, the yen soared around three percent to 153.04 per dollar, raising suspicion that Japanese officials had stepped into forex markets. It was sitting above 156 Thursday in Asia.

A rally on Monday -- after the yen hit a new 34-year low of 160.17 -- had led to similar speculation.

The government was tight-lipped on whether it had bought yen, though Masato Kanda, Japan's top currency official, told Bloomberg News intervention data would be disclosed at the end of the month.

Bloomberg analysis of central bank accounts suggested that Monday's move was likely an intervention by Tokyo worth around $35.4 billion.

"It would certainly appear to have the characteristics of an intervention," Nathan Thooft, of Manulife Investment Management, said.

"Repeated attempts certainly send a message to the market and while it may not fully hold, it should have some impact on preventing further meaningful weakness."

Traders will be keeping a nervous watch on developments on Friday and Monday, which are holidays in Japan that usually cause thin liquidity, while analysts said a strong US jobs report could also send the dollar racing again.

Equity markets were mixed in Asia as investors returned from a midweek holiday that closed most of the region.

Hong Kong resumed its rally to rise for an eighth day, while Sydney, Wellington, Mumbai and Bangkok were also up.

However, Tokyo, Seoul, Singapore, Taipei, Manila and Jakarta fell.

London rose at the open, while Paris and Frankfurt were both down.

Oil bounced, having tumbled more than three percent Wednesday on data showing US stockpiles ballooned last week by the most since February.

The commodity has also come under pressure from hopes for a ceasefire in the Middle East conflict, with US top diplomat Antony Blinken urging Hamas to accept a Gaza truce plan.

The Islamist group has said it will respond "within a very short period" to a plan proposed by mediators to halt the fighting for 40 days and exchange dozens of hostages for many more Palestinian prisoners.

Tokyo - Nikkei 225: DOWN 0.1 percent at 38,236.07 (close)

Dollar/yen: UP at 155.44 yen from 155.18 yen on Tuesday

Hong Kong - Hang Seng Index: UP 2.4 percent at 18,190.20

London - FTSE 100: UP 0.3 percent at 8,148.33

Shanghai - Composite: Closed for a holiday

Euro/dollar: DOWN at $1.0718 from $1.0719

Pound/dollar: UP at $1.2525 from $1.2523

Euro/pound: UP at 85.59 pence from 85.54 pence

West Texas Intermediate: UP 0.6 percent at $79.48 per barrel

Brent North Sea Crude: UP 0.6 percent at $83.96 per barrel

New York - Dow: UP 0.2 percent at 37,903.29 (close)