The euro extended gains on Aug. 14 as softer U.S. data and fading expectations for additional Federal Reserve tightening weighed on the dollar, while the yen briefly strengthened to 158.60 per dollar before settling at 159.30-159.40. July U.S. retail sales fell 0.6% month on month against expectations for a 0.1% rise, and sales excluding autos fell 0.3%, reinforcing the view that the U.S.-Japan rate gap could narrow. Fresh speculation that the Bank of Japan could raise rates as early as its September meeting also supported the yen, although some market participants said a September move was already partly priced in and may be a one-off. The euro rose to as high as $1.1585, its highest level in roughly two months, and traded at $1.1565-1.1575 late in New York, while EUR/JPY weakened to 184.25-184.35. Rising U.S. long-term yields into the close, with the 10-year yield up 0.05 percentage point to 4.69%, helped the dollar recover and capped the yen's advance.