The dollar touched a five-month high against the yen on Wednesday after the Japanese currency took a hit from a disappointing February reading for industrial output, although it quickly recouped those losses.
The yen slipped to 107.69 per dollar, its lowest level since Oct. 22, but it soon turned around as the data also showed upbeat Japanese production forecasts for the coming months.
This left the dollar at around 107.35 yen as of 9:50 p.m. EST Tuesday, up slightly from late U.S. levels.
The euro bought around $1.2945, up from $1.2921 in late New York trading.
Some market participants said that offers to sell dollars by Japanese accounts from 107.70 yen through to around 108 yen also prevented the U.S. currency from climbing higher.
"The market tested the upside (after the data) but couldn't break," said a trader at a European brokerage. "But it's also not set to go down just yet, so we're in a very tight range right now."
While traders were holding on to long-dollar positions, some were willing to take profits close to the 108 yen level, which could send the dollar down a corrective path to around 106.50 yen in the near term, dealers said.
Japanese industrial production slipped 2.1 percent in February from a month earlier, compared with market forecasts for a drop of 1.1 percent following big gains in January.
However, the government data also showed that manufacturers' output -- the core component of production -- was expected to rise 0.9 percent in March and 3.6 percent in April.