SYDNEY, May 7 (Reuters) - The dollar remained on the defensive on Thursday as hopes for a de-escalation in the Iran-U.S. war supported oil-exposed currencies, while Tokyo resumed its verbal intervention in support of the yen keeping speculators cautious.

Iran said on Wednesday it was reviewing a U.S. peace proposal that sources indicated would formally end the war but leave unresolved key U.S. demands that Iran suspend its nuclear program and reopen the Strait of Hormuz.

Analysts were worried any agreement that did not open the vital waterway to shipping would likely see oil prices rise again, with Brent edging 0.8% higher in early trading.

"It remains far from clear that there is any material movement toward reopening the Strait, or if we are instead stuck in a rebranded 'ceasefire with no oil' purgatory," wrote Helima Croft, head of global commodity strategy at RBC Capital Markets.

"A corner of the market will undoubtedly view a one-page memorandum to resume negotiations over the next thirty days as significant progress," she added. "However, an MoU is unlikely to translate into an immediate resumption of shipping traffic and major production restarts."

Hopes for de-escalation had seen oil prices slide overnight, easing inflationary fears and pulling down Treasury yields as markets pared back the risk of U.S. rate hikes.

That left the dollar index back at 97.950 and well short of last week's top of 99.092.

The pullback in oil had boosted the euro, given the continent is far more reliant on imported oil than the United States, and it was 0.1% firmer at $1.1757 having touched a two-week top of $1.1797 overnight.

The yen had gotten a further lift from speculation the Japanese authorities had intervened on Wednesday to buy the currency, sending the dollar as low as 155.00 at one stage.

The dollar was last trading at 156.15, with dealers on guard after Japan's top currency diplomat Atsushi Mimura said the country was not restricted on intervention.

U.S. Treasury Secretary Scott Bessent will reportedly meet Japan's Prime Minister Sanae Takaichi next week to discuss curbing speculative yen selling, among other issues.

Sources told Reuters that authorities intervened on Thursday last week, with money market data suggesting they sold about $35 billion to support the yen. Since then, the market has seen three abrupt spikes in the yen through to Wednesday.