The dollar was steady on Friday as traders wagered that the Federal Reserve is done with rate hikes after data showed U.S. consumer prices increased moderately in July, while the yen was flirting with the psychologically key 145 level.

Japan's core inflation likely eased in July, according to a Reuters poll of analysts, weighed by softer commodity prices, although the indicator is set hold above the central bank's 2% target for the 16th straight month.

Asian stocks lost ground on Thursday, still hurting from China's slip into deflation, with investors particularly cautious ahead of a crucial U.S. inflation report that will likely influence the Federal Reserve's monetary policy path.

Japanese wholesale inflation slowed in July year-on-year, easing for a seventh straight month due to softer energy utility costs, central bank data showed on Thursday, a sign the pressures that drove up consumer prices are running their course.

China's consumer sector fell into deflation and factory-gate prices extended declines in July, as the world's second-largest economy struggled to revive demand and pressure mounted on Beijing to release more direct policy stimulus.

A growing number of Chinese graduates are abandoning the bright lights of the country's mega-cities, with state media reporting almost half are returning to their hometowns within six months of graduation amid a sagging job market.