The dollar edged up on Friday, building on the previous day's rebound from multi-year lows on speculation that a strong reading for upcoming US jobs data could highlight the long-forgotten attraction of US assets. Speculators locked in profits from weeks of dollar-selling, which had driven the yen to a five-year peak and the euro to record highs on Thursday, wary of the possibility, albeit small, of dollar-buying intervention by Japan or Europe.
"Recent US data has been pretty good, so there may be an expectation that the payroll figures will shift the focus of the market to the relative strength of the US economy," said Kikuko Takeda, market economist at Bank of Tokyo-Mitsubishi.
The dollar fetched around 103.55 yen, up from 103.25 in late US trade and well off the five-year low of 101.83 hit on Thursday.
The euro bought around $1.3275, little changed from late US levels and down about a cent from the record high of 1.3385.
Sterling stood at around $1.9220, compared with 1.9242 in late New York trade and the 12-year peak of 1.9440, also marked on Thursday.
"Buy-backs of the dollar started yesterday and it continued well into today's Asian trade," said Shogo Nagaya, forex manager at Nomura Trust and Banking.
US data for November is due on Friday. Economists' median forecast is for 180,000 new jobs compared with a rise of 337,000 in October.
Dollar bulls hope a solid reading would cement the case for further rate hikes by the US Federal Reserve, which would bolster the attraction of the dollar to foreign investors.
But others remained nervous, recalling that the dollar had failed to gain on surprisingly strong job figures for October, overwhelmed by concerns about the United States' ability to finance its gaping current account deficit.
Some traders said the market's reaction to the figures could serve as a litmus test for the dollar.
"If the market sells the dollar even if the numbers are good, it'll be a sign that dollar sentiment is still bearish," said Katsunori Kitakura, manager of the treasury department at Chuo Mitsui Trust and Banking.
Some traders said the dollar was also supported by caution over possible intervention by the Japanese and European authorities, either alone or together.
Officials from both regions have expressed concern that the dollar's rapid fall could damage their economies.