Some market participants attributed the dollar's strength to the recent slide in oil prices and others reckoned the U.S. currency was benefitting from heightened risk aversion.
Dealers in Tokyo said demand for dollars by Japanese investors helped lift the currency broadly during an otherwise quiet session. The nearly 0.6 percent drop in the benchmark Nikkei stock average also weighed on the yen.
The market has been torn between the dollar-positive factor of rising U.S. interest rates and the persistent negative factor of the giant current account and budget gaps, leaving currencies at the mercy of short-term speculators.
Many in the market are waiting for a clear trend to emerge before making big bets, with some players cautious ahead of a Group of Seven meeting of rich nations in Washington this weekend.
While oil prices rather than currencies are expected to dominate discussion, analysts said the market would pay close attention to any policymaker comments on exchange rates and global imbalances.
The U.S. currency has jumped about 5 percent against the euro and the yen this year, benefiting from the interest rate advantage it has over other major currencies, luring investors to short-term dollar deposits.
The International Monetary Fund said on Wednesday that global economic growth was uneven, with expansion reliant on the United States and China in the face of a disappointing performance by Europe and Japan. The Fed has raised rates by a quarter percentage point seven times since June, bringing its funds rate to 2.75 percent. Rates in the euro zone and Japan are expected to remain stuck for a while at 2.0 percent and virtually zero respectively.