The greenback climbed to five-week peaks against the yen of 144.735 , and last traded up 0.7% at 144.71 yen.
The recovery of the dollar against both the euro and yen pushed the dollar index up 0.1% to 102.56 .
Earlier in the session, the dollar dropped after data showed the consumer price index (CPI) rose 0.2% last month, matching the gain in June.
Investors are also on the lookout for possible intervention by the Japan to lift the yen.
In September, Japan intervened when the dollar rose above 145 yen, pushing the pair to around 140 yen as the Ministry of Finance bought the yen to weaken the dollar.
Persons:
Florence Lo, Yen, Helen, It's, Francisco Federal Reserve Bank Mary Daly, Gertrude Chavez, Dreyfuss, Alun John, Mark Potter, Andrea Ricci, Richard Chang
Organizations:
REUTERS, Monex USA, Francisco Federal Reserve Bank, Federal, Market, Fed, Labor Department, Analysts, Ministry of Finance, Thomson
Locations:
U.S, Washington, Japan, London