The common currency was trading at $1.3374 and 107.12 yen in Tokyo trade, compared with $1.3369 and 106.94 late Thursday in New York.

The greenback stood at 80.11 yen in Friday trade, compared with 79.98.

Noriaki Murao, a senior dealer at Bank of Tokyo-Mitsubishi UFJ in New York, said Thursday's better-than-expected German business survey had lifted the single currency.

"It's true we're still a bit concerned about Greece's problems ... but in general, it's likely that Athens can avoid a disorderly default," Murao told Dow Jones Newswires.

The Ifo index -- a key barometer of corporate confidence in Germany -- hit its highest level in seven months in February due to strong domestic demand, which has largely shielded Europe's biggest economy from the eurozone crisis.

Adding to the positive sentiment was news that the Greek parliament had approved a law on a historic 107-billion-euro debt writedown with private creditors.

With the debt restructuring on track, lawmakers will now turn to legislation on further austerity cuts and tough targets required to get an additional bailout of 130 billion euros.

The dollar's upside against the yen may be limited after going as high as 80.40 yen this week, Sumino Kamei, senior analyst at Bank of Tokyo-Mitsubishi UFJ.

"With the dollar taking a break against the yen after its prolonged uptrend, greenback-selling flows from exporters may be seen," she said.

But the downside may also be limited by a gathering recovery in the US economy, she added.