The EUR and high-yielding currencies held strong on Friday after an improvement in U.S. housing and jobless claims data increased investor appetite for risk ahead of key U.S. jobs data later in the day.
Still, reflecting consistent worries about a slowdown in the U.S. and global economies, the JPY was locked near a 15-year peak versus the greenback and the Swiss franc hovered near a record peak against the EUR.
The two low-yielding currencies tend to be favored when investors want to avoid losses rather than seek higher returns.
"Market players have been building up positions for some time to brace for a weak U.S. recovery. So I guess that any upside surprise in the payrolls data could move the market," said Daisuke Karakama, market economist at Mizuho Corporate Bank.
The euro changed hands at $1.2815 little different on the day but within range of this week's high of $1.2856 hit on Wednesday.
The next target for the EUR was around $1.2873 -- a 38.2 percent Fibonacci retracement of its fall from its August high around $1.3334 to its August low near $1.2588. The target after that would be $1.2923, touched on Aug. 18.
Pending U.S. home resales increased unexpectedly in July and new claims for unemployment insurance fell for a second straight week, which, together with upbeat manufacturing data on Wednesday, lowered the gloom over the economy.
The euro was also assisted by healthy results in Spanish and French bond auctions on Thursday.
The USD JPY stood at 84.35 yen per dollar, up slightly on the day but not far from the 15-year low of 83.58 yen hit at the end of last month.
"There are said to be some stop-losses and option triggers around 83.50. So it could get ugly if the dollar/yen hits that level after the payroll data," said Teppei Ino, an analyst at Mitsubishi-Tokyo UFJ Bank.
Traders are now careful about bidding the yen too much after Japanese ministers stated they could take action -- normally a code word for intervention -- to stem the yen's strength since late last week.
But many traders have doubts over whether Tokyo will step into the forex market at the moment given the high hurdle of Tokyo to convincing other G7 members about the need to intervene at a time when they are calling on China to make the yuan more flexible to ease global imbalances.
A sharp decline in dollar/yen, such as 1 to 2 percent or more in a single day towards the 80 yen level and below, is perceived as the most likely scenario that would prompt Japan to stick its neck out and buy dollars.
Thus many traders expect the market to test the willingness of Japan to intervene, especially if U.S. payrolls data comes in weaker than expected.
Economists expect a decline of 100,000 jobs overall and a rise of 41,000 jobs in August.
The Swiss franc traded at 1.2987 franc per euro EURCHF=R, not far from a record high of 1.2850 hit earlier this week.
Versus the USD, the Swiss currency stood at 1.0131 franc per dollar near a nine-month peak of 1.0065 marked earlier in the week.