US non-farm payrolls for March, due at 1230 GMT are expected to show an increase of 200,000 jobs during the month, according to economists polled by Dow Jones Newswires.
If the results surprise to the upside, dealers say the dollar could rise to as high as Y95. Otherwise, investors will likely use the data as a cue to sell the currency to balance their portfolios, possibly bringing the dollar down to Y93 or cheaper.
Some Asian hedge funds that didn't want to risk exposure to such a sharp move have already taken profits from recent dollar / yen transactions, dealers said.
The US unit rose to a seven-month-high of Y94.05 on Thursday, but ended New York trading at Y93.88. As of 0450 GMT, it was lower, at Y93.74.
"The dollar has risen enough for now. It's time to reap some profits," said Shinichi Hayashi, a senior dealer at Shinkin Central Bank.
The euro was at $ 1.3568, lower than $ 1.3585 in New York Thursday. Trade was subdued with many markets closed for the Good Friday holiday.
In the longer term, the euro should decline further as recent signs of US economic strength prompt investors to put their money into dollar-denominated assets, said Akira Maekawa, a strategist at GFT, a unit of the US-based Global Futures and Forex.
The single currency, meanwhile, was at Y127.18, weaker than Y127.55 in New York late Thursday. Further declines are likely, dealers said, due to strong offers from Japanese exporters.
The ICE Dollar Index, which tracks the greenback against a trade-weighted basket of currencies, was at 80.805, higher than 80.718 in New York.
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