The nonfarm payroll report is also one of the last major indicators to be released before the Federal Open Market Committee's September monetary policy meeting.
"If the actual data turns out to be a big miss, enthusiasm on the September rate hike will dampen, and the dollar's rally will probably lapse," Yang said.
In the currency market, the dollar traded at 95.689 against a basket of currencies on Friday afternoon Asia time, compared to levels above 96.00 earlier in the week. The greenback rallied last Friday, after remarks from Yellen and Fed vice chair Stanley Fischer renewed speculations over an imminent rate hike.
On Thursday, the dollar index had finished at 95.653. Some currency strategists attributed the dollar's decline to profit taking.
"Investors took profits on their long dollar positions ahead of Friday's nonfarm payrolls report," explained Kathy Lien, managing director of foreign exchange strategy at BK Asset Management, in a late Thursday note.
"The sell-off was motivated by a weak manufacturing ISM number, but the stakes are high for [Friday's] release and some traders decided it was smarter to reduce exposure."
The U.S. ISM manufacturing index for August was at 49.4, the weakest read since January.
The Japanese yen remained at the 103 handle against the dollar, trading at 103.55 Friday afternoon local time. The dollar/yen pair was up from levels below 101.00 in the previous week, partly helped by a rising dollar.
The relative yen weakness, however, did not boost shares of major exports in the final trading day of the week. Toyota shares closed down 0.29 percent, Honda fell 0.59 percent, while Sony advanced 1.52 percent.
Shares of troubled container shipper Hanjin Shipping remained halted on Friday, after the company filed for court receivership on Wednesday. Its last closing price was at 1,240 Korean won, after tumbling form levels near 1,800 won earlier this week.
"At this current point in time, we are not sure whether Hanjin Shipping will continue to operate under court-receivership or file for bankruptcy and assets will be liquidated," wrote Daniel Yoo, global strategist at Kiwoom Securities, in a Friday note.
In the oil market, prices again retreated on Thursday, falling more than 3 percent on the back of concerns over a supply glut after data showed a build-up in U.S. crude stockpiles.
But during Asian trade on Friday, U.S. crude futures were up 0.25 percent at $43.27 a barrel as of 4:01 p.m. HK/SIN, while the global benchmark Brent was up 0.13 percent at $45.51.
Elsewhere, G-20 leaders were set to meet at a summit in Hangzhou, China this weekend. Key items on the agenda will likely include China's growth, celebrating Barack Obama's last summit as U.S. president, steel overcapacity and climate change.
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