A separate report showed continued improvement in the jobs market: New jobless claims fell last week to below 300,000.
In midmorning trading, the dollar rose 1.1 percent to 119.12 yen after touching a two-week low near 117.45 yen earlier on Thursday. The greenback had fallen three straight days after hitting a seven-year peak on Monday.
The euro fell 0.5 percent to $1.2387, as dollar buying spread. Greece has been on the radar once again, acting as a cap on any euro rally.
Greek yields bucked the downward trend in euro zone bond yields, with shorter-term yields remaining above longer-term on investor concerns that fresh political upheaval could drive Athens toward another default.
The euro also weakened after the European Central Bank said banks had taken just 129 billion euros in the second tranche of its targeted long-term loans, keeping pressure on the bank to ease policy more dramatically in the new year.
The euro's losses pushed the dollar index, which tracks the greenback's performance against a basket of currencies, up 0.4 percent to 88.638.
In other currencies, Norway's crown sank against the euro after a slump in oil prices and low demand provoked its central bank into an early, unexpected cut in interest rates, driving the crown to its weakest since mid-2009.
The euro was last up 1 percent on the day at 9.0034 crowns.
More on foreign exchange.