The euro gained to $1.4252 in Tokyo morning trade, up from $1.4234 in New York late Tuesday.

The single European currency rose to 116.02, compared to 115.79 yen.

"The more significant driver of currencies was US dollar weakness," said National Australia Bank in a client report, noting that the Australian dollar also strengthened against the US currency.

"This came on the back of disappointing US data releases that caused the market to question the durability of the US recovery," it said.

Housing starts in the United States tumbled 10.6 percent from March to a seasonally adjusted annual rate of 523,000.

The dollar was also under pressure after European Union officials grappled with sovereign debt woes in Greece and other eurozone countries.

EU finance ministers meeting in Brussels on Tuesday considered how to prevent Greece from defaulting on its loans.

Leading eurozone policy-maker Jean-Claude Juncker said that a "soft restructuring" of Greece's 330-billion-euro debt is a possibility as an EU-IMF mission in Athens was extended by one week.

On Monday, EU ministers approved a 78-billion-euro bailout for debt-laden eurozone nation Portugal.

The dollar firmed against the Japanese yen to 81.40 yen from 81.36 yen.

Some technical signals suggest upward short-term momentum for the dollar against the yen, dealers said.

Citibank Japan chief currency strategist Osamu Takashima said the momentum would be short lived.

For the medium-term, "I'd like to keep sentiment neutral for the dollar against the yen" due to weak US shares as well as mixed economic indicators, which are a bad factor for the greenback, he told Dow Jones Newswires.