The dollar dawdled at the lower end of recent ranges on Friday after soft US manufacturing data fuelled a view that the Federal Reserve may slow or even temporarily halt its tightening campaign.
With investors almost unanimously expecting the Fed to raise rates by 0.25 percentage point for the third straight meeting next Tuesday, many in the market are seeking clues to the Fed's moves after that.
"Market participants are wondering if the Fed might hold off on interest rate hikes in November and December," said Tohru Sasaki, chief forex strategist at J.P. Morgan Chase in Tokyo.
"If the Fed statement is quite strong or there is almost no change from the previous statement, I think the dollar will see some rebound."
The dollar bought around 109.60 yen little changed from late Thursday trade in New York, where it fell around 0.4 percent.
The dollar stayed boxed in the 109-110.50 yen range of the past month, and may not break out until the Bank of Japan releases its "tankan" survey of business sentiment on October 1.
Sasaki expects the quarterly survey, considered one of the most important indicators on the Japanese economy, to build on its previous upbeat showing and push the dollar below 109 yen.
The euro was also little changed at $1.2185 some distance from the one-week low of $1.2120 hit before the weak US manufacturing data landed on Thursday.
The Philadelphia Fed's index of manufacturing activity in the US mid-Atlantic region fell to 13.4 in September from 28.5 in August, at odds with market expectations for a milder decline to 24.5.
The US consumer price index (CPI) also showed inflation remained tame, suggesting there was little need for the Fed to raise rates hastily.
CPI rose 0.1 percent in August, in line with expectations, while core CPI, which strips out figures on volatile food and energy, also increased 0.1 percent, half the expected gain.
The dollar also came under pressure on Thursday after bearish comments on the economy by Federal Reserve Governor Edward Gramlich, a voting member of the Federal Open Market Committee.