"Bush's meeting with Koizumi may shake thing up a little over the weekend," especially if there is any discussion of the exchange rate, said Bill Bertha, a senior trader at Mellon Financial Corp in Pittsburgh.
Concerted criticism
Japan has been criticized by other Asian nations including China and South Korea, and by US manufacturers, for encouraging a weaker yen to make its goods cheaper abroad. Officials' comments favoring a lower yen fueled its 14.6 percent drop since late September.
The dollar pared gains against the euro after a University of Michigan survey showed consumer confidence unexpectedly declined this month.
The consumer sentiment index fell to 90.8 for February, from 93 in January, compared with economists' predictions it would climb to 93.8.
Expectations for a stronger report helped boost the dollar to as strong as US$0.8695 per euro in earlier trading.
"The dollar is giving back a little of that now given that the numbers are a little weaker," said Tim Fox, a currency strategist at Standard Chartered Bank Plc.
Industrial production fell 0.1 percent in January, its smallest decline since last July, after a revised 0.3 percent drop in December, the Federal Reserve said. Economists had predicted a 0.2 percent slide, according to a Bloomberg News poll.
Evidence of a pickup in US growth came earlier this week with reports showing retail sales rose more than expected in December, while the number of workers filing initial applications for jobless benefits fell for a fifth week in six.
In other trading, the dollar was little changed at US$1.4314 per British pound from US$1.4310, at SF1.6974 from SF1.6981 and against the Canadian dollar at C$1.5897 from C$1.5922.
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