The dollar rose to one week highs against the yen on Thursday amid signs of a truce in the Sino-U.S. trade war, but investors remained wary ahead of a closely watched meeting between the two countries at the G20 summit this weekend.

The dollar was up 0.32% at 108.11 yen by 02:51 AM ET (06:51 GMT), its highest since June 19.

The South China Morning Post (SCMP), citing sources, said in Washington and Beijing were laying out an agreement that would help avert the next round of tariffs on an additional $300 billion of Chinese imports.

On Wednesday, U.S. President Donald Trump said a trade deal with his Chinese counterpart Xi Jinping was possible this weekend though he was prepared to impose tariffs on virtually all remaining Chinese imports if talks fail.

Trump and Xi are due to meet at the June 28-29 G20 summit in Osaka.

The potential implications of the Trump-Xi meeting for U.S. monetary policy are huge, Yamamoto at Mizuho Securities said.

"If the two sides agree not to impose more tariffs, the Fed would no longer need to cut rates," he said. "On the contrary, if the talks point to the imposition of more tariffs that could nudge hesitant policymakers towards rate cuts."

The dollar has taken a hit over the past week - it reached a six-month low of 106.78 yen on Tuesday - after the Federal Reserve opened the door to possible monetary easing in the coming months.

The U.S. dollar index against a basket of six major currencies was up 0.16% at 95.88, building on the previous days modest gains.

The index had retreated to a three-month low of 95.36 at the start of the week amid the Fed's easing prospects. But it has managed to regain some traction after comments this week from central bank officials such as Chair Jerome Powell that tapered aggressive rate cut expectations.

The euro was a touch lower against the greenback at 1.1356.

The New Zealand dollar was last at 0.6675, within striking distance of a two-month peak of 0.6693 scaled on Wednesday, when the currency bounced after the Reserve Bank of New Zealand refrained from lowering rates.

The Australian dollar was at 0.6692 after hitting a two-and-a-half week high of 0.6999 overnight.