The dollar pulled away from 18-month low, gaining strength for three days straight.
The dollar firmed against the euro and yen on Friday ahead of the April US non-farm payrolls due later in the day that could support the greenback.
The dollar stood steady at 107.14 yen, having gained for three straight days to pull away from an 18-month low of 105.55 plumbed on Tuesday. The US currency was enroute to gain 0.6% versus the yen this week.
The yen, which jumped after the Bank of Japan opted to stand pat on monetary policy last week, had some of its gains trimmed after Japanese officials said they could act if needed to halt its rise. Investors, however, remain sceptical whether an intervention by Japan would have any lasting effect.
The euro, which had risen to an eight-month peak of $1.1616 on Tuesday, was effectively unchanged at $1.1405 after losing 0.8% overnight. Traders attributed the common currency's fall to covering of dollar short positions ahead of Friday's US jobs data.
A Reuters survey showed economists expect US payrolls rose by 202,000 in April after increasing by 215,000 in March.
Investors only see a 13% chance that the Federal Reserve will hike interest rates at its June meeting, according to CME's FedWatch, and a less than 50% chance of a hike at every meeting until December. The reduced prospect of monetary tightening has been a major factor that has weighed on the dollar recently.
Makoto Noji, currency strategist at SMBC Nikko Securities, reckons that the ebb in US rate hike expectations has made the currency market vulnerable to a positive surprise from the jobs data.
"The US jobs report may not be able to single-handedly help the dollar reverse its losses suffered over the past few weeks, but the data could still serve as a catalyst for the dollar to begin its rebound," Noji wrote.
Still, the market remained wary of the jobs data opening a fresh phase of dollar selling.
"In the wake of lacklustre US initial jobless claims, the chances are the jobs report could disappoint and the dollar could be sold in initial reaction," said Masashi Murata, senior currency strategist at Brown Brothers Harriman in Tokyo.
Thursday's jobless claims showed the number of Americans filing for unemployment benefits rose more than expected last week, posting the biggest gain in more than a year.
"In such a case, what bears watching is how speculators react. They could quickly move past the US jobs report and decide to renew their yen buying," added Murata at Brown Brothers Harriman, who attributes the end of the "Abenomics" market as a key factor behind the yen's recent appreciation.
Abenomics is a series of reflationary measures initiated by Japanese Prime Minister Shinzo Abe which had helped weaken the yen, pushing it to a 13-year low near 126 to the dollar in June 2015.
The dollar index was flat at 93.746 after touching a 3-1/2-month low off 91.919 on Tuesday.
Elsewhere, the Australian dollar slid roughly 1% to a two-month low of $0.7394 after the Reserve Bank of Australia (RBA) slashed its inflation forecasts, suggesting the door was open for another interest rate cut.
The Aussie was poised to lose 2.6% this week, dogged by sliding commodities and hit by Tuesday's RBA rate cut.
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
 "Representational image")
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
)
){kind=small}
){kind=small}
)
)
)
)
)
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}