The dollar was choppy against the yen between late Thursday and early Friday as New York trading closed and the Tokyo market opened.

At one point the dollar reached 123.11 - a four and a half year high - and trading averaged out at 123.0, maintaining the dollar's strong position against the yen.

The dollar was buoyed by the release of US producer price data on Thursday, which were better than the markets had expected.

Meanwhile the yen fell to a one-week low against the euro on the back of speculation that  the Bank of Japan is to raise the overnight lending rate, although analysts expect any raises to be gradual.

Bank of Japan governor Toshihiko Fukui "is unlikely to be that hawkish, just repeating his stance for gradual rate hikes,'' bond and currency dealer Tsutomu Soma of Okasan Securities told Bloomberg.