The dollar was trading 0.37 percent higher vs the Japanese yen at 106.80 as of 05:45 GMT on Tuesday, with investors preparing for key inflation data later in the day.
Ahead in the day, the US consumer price index (CPI) for February will be out at 12:30 GMT, with a 0.2 percent build seen from a prior month 0.5 percent increase.
Inflation data is closely monitored by policymakers of the Federal Open Market Committee in order to define future monetary policy adjustments.
Last week, the US Labor Department said the US economy added 313,000 jobs in February, surpassing a forecasted build of 200,000.
However, average hourly wages growth came out below estimation, with a 0.1 percent increase in February, compared to a 0.2 percent build seen.
The slowdown in wages increased uncertainty over the future of monetary policy changes as investors initially thought four rate hikes were possible, but given the latest data dismissed that idea and settled for Fed’s forecast of three rate adjustments in 2018.
According to Federal Reserve funds tracked by CME Group’s FedWatch tool showed expectations for a 25 basis points interest rate hike in March are currently at 88.8 percent.
A rising interest-rate environment tends to benefit the greenback as demand for risky assets grow, while non-yielding assets such as the Japanese yen fall into pressure.
The US dollar index, which measures the greenback against six major currencies, was trading 0.15 percent higher at 90.00 by the time of this writing.
On the data front, the Tertiary industry activity index, which gauges changes in the total value of services acquired by businesses, dropped 0.06 percent against an estimated fall of 0.2 percent.