Tokyo - The dollar strengthened in midday Asian trade on Friday as investors reacted to fresh US data that pointed to a brightening jobs picture but little pickup in factory output.
The greenback strengthened to ¥97.59 from ¥97.36 in New York on Thursday, while the euro bought $1.3343, slipping slightly from $1.3346 in US trading.
The European single currency gained on the Japanese unit at ¥130.20 from ¥129.96, supported by figures this week that showed the 17-nation eurozone exited recession in the second quarter.
Industrial production in the United States was flat in July, Federal Reserve data showed on Thursday, in a fresh sign that economic growth remains tepid.
But new claims for US unemployment insurance benefits fell last week to their lowest level in six years, a fresh sign of labour market tightening and adding to expectations that the Federal Reserve will begin tapering its bond-buying stimulus programme soon.
A pull-back on the Fed's quantitative easing scheme is a positive for the dollar as it means fewer greenbacks in the financial system, boosting demand and the unit's value.
"The labour market is on a stronger footing, and we're expecting the August payroll report to continue to show decent job gains - enough to allay fears that the economy is softening," Aroop Chatterjee, a foreign-exchange strategist at Barclays, told Dow Jones Newswires.
Sentiment on Europe also got a boost from strong British retail sales figures, a key indicator of consumer confidence, with the data showing a 1.1% rise in July from the previous month as a heatwave fuelled spending on food, drinks and summer clothing.
Analysts said the figures pointed further to expectations of a rise in the Bank of England's record-low interest rate sooner than expected.
In other trading, China's yuan strengthened to a fresh high against the dollar after China's central bank guided the yuan stronger for the second straight session.
The greenback was at 6.1108 yuan on Friday morning, after Thursday's record low closing of 6.1125.
The yuan remains on an upward trend against the dollar, thanks to strong demand for the Chinese currency from companies, traders said.