They said that the market was largely unaffected by a series of indicators on the Japanese economy, including the first fall in consumer prices for 10 months, while an upgrade to US economic growth had a muted impact.

The dollar dipped to 117.87 yen in Tokyo afternoon trade from 118.02 yen in New York late Thursday.

The euro gained to 1.3346 dollars after 1.3331 but eased to 157.30 yen from 157.43 yen.

"Players remain cautious as there are many factors we have to watch closely such as the Iran issue and the US economic situation," said Masaki Fukui, senior market economist at Mizuho Corporate Bank's forex division.

The week-old standoff between Britain and Iran over 15 British naval detainees in the northern Gulf has sent oil prices to a six-month high.

The dollar turned in a mixed performance in US trade on Thursday as an upward revision to estimates of US fourth quarter growth failed to ease market concerns about economic weakness.

The US economy expanded at a 2.5 percent annualised pace in the fourth quarter of 2006, a bit faster than earlier estimates, the Commerce Department said.

But analysts cautioned that more tepid growth was likely ahead as the economy takes a hit from a slumping real estate market.

Japan released a mixed set of economic indicators.

The core consumer price index (CPI) fell 0.1 percent in February from a year earlier, the first fall in 10 months, while industrial output was down 0.2 percent.

"But a continued fall in the CPI is unlikely, particularly as oil prices are back on a rising track," Fukui said.

Meanwhile average monthly household spending rose 1.3 percent in February from a year earlier, while the jobless rate remained unchanged at 4.0 percent.