The dollar gained on Thursday, tracking advances in oil prices and US Treasury yields, with the Bloomberg Dollar Spot Index on track for its largest single-day gain in two weeks. The Japanese yen weakened against the greenback.

The Bloomberg Dollar Spot Index edged up 0.2% to 1205.40. As optimism over a potential easing of tensions in the Middle East faded, oil prices rose, positioning the dollar for its biggest daily increase in a fortnight.

With the next policy direction of Federal Reserve Chair Kevin Warsh remaining unclear, traders are ramping up hedging against dollar volatility ahead of Friday's US nonfarm payrolls report. US Treasuries declined as oil rebounded from a three-week low, reigniting expectations for Fed rate hikes, while Google parent Alphabet Inc. launched a large-scale corporate bond sale.

USD/JPY climbed 0.4% to 158.36, after earlier touching 158.55, its highest level since July 31.