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The dollar's rally on better-than-expected US retail sales fizzled in Asian trading Thursday while the euro was also under pressure after disappointing eurozone data highlighted the region's woes.
The greenback pushed past the 96 yen level in US trading as the Commerce Department said retail sales gained 1.1 percent in February over the month before, boosting optimism over the world's biggest economy.
But the unit gave up those gains in Asia, fetching 95.81 yen in late morning Tokyo trade, against 96.14 yen in New York Wednesday afternoon.
"No particular news is behind its fall, but unless the (dollar/yen) pair is able to recover the 96.00 level, it could continue falling toward 95.50," said a senior trader at a major bank in Japan.
The euro, meanwhile, was mixed at $1.2961 and 124.20 yen against $1.2956 and 124.56 yen following a lacklustre Italian bond sale and weak eurozone factory output data, which showed a 0.4 percent on-month fall in January.
The figures were "a reminder that the eurozone remains in the grip of what looks likely to be a shallowish but extended recession", National Australia Bank said in a note.
Markets were awaiting the confirmation of a new management team at the Bank of Japan, which was expected to get a parliamentary green light at the end of this week, stoking speculation of further monetary easing.
"Confirmation of all of the government's BoJ nominees will send a positive signal that looser central bank policy monetary policy will be a certainty," said SMBC Nikko Securities general manager of equities Hiroichi Nishi.
Japanese media have said the largest opposition party would not back the nomination of Kikuo Iwata to serve as one of two BoJ deputy governors, throwing the focus on smaller opposition parties' view of the candidate.
Iwata, along with the nominee for governor Haruhiko Kuroda, is a strong supporter of giving more control of the independent BoJ to the government, and is also an advocate of further aggressive monetary easing.
A vote against Iwata could dent Prime Minister Shinzo Abe's plans for a central bank team that supports his policy prescriptions to fix the world's third-largest economy.
However, his nomination was expected to narrowly pass in Japan's upper house of parliament Friday, with lower-house approval expected later Thursday.
-- Dow Jones Newswires contributed to this article --