LONDON, April 18 Reuters The dollar fell for a second day on Thursday after a rare warning by the finance chiefs of the United States, Japan and Korea over the sharp decline in other currencies, which in turn offered the yen some rare respite.

The yen got a modest lift after Japan39;s top currency diplomat Masato Kanda said finance leaders of the G7 reaffirmed their stance that excessive currency volatility was undesirable.

Strong U.S. economic data and persistent inflation have prompted investors to drastically rethink the chances of the Federal Reserve cutting rates any time soon. Tensions in the Middle East have also added to the dollar39;s safehaven appeal.

The upshot has been other currencies, particularly in Asia, have been battered. The yen has been pinned near 34year lows, which has prompted several warnings from Japanese authorities as traders fret about possible intervention.

The U.S., Japan and South Korea agreed to consult closely on foreign exchange markets in their first trilateral finance dialogue on Wednesday, in a nod to concerns from Tokyo and Seoul over their currencies39; recent sharp declines.

It sends another strong signal to market participants that Japan and Korea are moving closing to stepping into the FX market, while at the same time officials from Japan and Korea will be hoping that the joint statement with the U.S. helps to strengthen the credibility of verbal intervention as well, MUFG strategist Lee Hardman said.

The Japanese…