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By Bloomberg

The dollar weakened for a second day against the yen, following a five-day advance, amid speculation its recent climb was too rapid.

The U.S. currency is headed for gains against all of its 16 major counterparts this year for the first time since 2000 as the Federal Reserve moves to raise interest rates next year for the first time since 2006. Australia’s dollar traded within a cent of its post-float low to its New Zealand peer.

“The dollar’s declines since the start of Asian trading yesterday reflect a degree of profit taking just ahead of the holidays,” said Yasuhiro Kaizaki, vice president for global markets at Sumitomo Mitsui Trust Bank in New York. “The trend for a higher dollar hasn’t changed.”

The dollar declined 0.2 percent to 120.32 yen at 9:48 a.m. in Tokyo from yesterday, when it fell 0.2 percent. It reached 120.83 yen on Dec. 23, the highest since Dec. 9, and gained 3.7 percent during the five-day advance.

The U.S. currency was little changed at $1.2192 per euro after weakening 0.2 percent yesterday. The yen gained 0.1 percent to 146.82 per euro.

The Bloomberg Dollar Spot Index, which tracks the currency against 10 major peers, has risen 11 percent this year, set for the biggest annual gain in data starting in December 2004.

The gauge was little changed at 1,1130.64 after falling 0.3 percent yesterday, a day after its 14-day relative-strength index reached 71, above the 70 level some traders see as a signal an asset may have risen too far, too fast.

“The dollar has trended lower in thin holiday trading, though the greenback is on course to end 2014 on a strong note,” BNP Paribas SA’s Steven Saywell, global head of currency strategy, and other analysts wrote in a note to clients yesterday. “We remain long USDJPY and short EURUSD.”

Australia’s dollar traded at NZ$1.0488 after reaching NZ$1.0477 on Dec. 23. That was the lowest level since December 2005, when it recorded the post-float low of NZ$1.0432.