The dollar scaled back its earlier decline against the yen on Friday as data showed sales of U.S. new homes in May came in stronger than expected in May, reducing worries about a slowdown in the domestic housing market.
Traders were looking to U.S. inflation data due next week to provide clues on the U.S. Federal Reserve's likely interest rate policy.
The dollar index - which measures the greenback against a basket of six major currencies, the euro the heaviest weighted among them - inched down by 0.33 percent to 97.27 as the euro hit $1.1195, its highest since Monday.
The European Central Bank is deciding when and how quickly to wind back its expansive quantitative easing (QE) program.
"With the debate over ECB QE policy heating up, expect the euro to be much more sensitive to data surprises," wrote ING currency strategist Viraj Patel in a research note.