In the 12 months through December, the PPI rose 2.6 percent after accelerating 3.1 percent in November.
Palladium rose by 0.23 percent to $1,085.50 an ounce after hitting a nine-day low of $1,075.50.
And while the U.S. Federal Reserve has been slowly tightening policy over the last two years, traders have been repricing market expectations of when Europe and Japan will follow suit. "If any of those were to be shaken that would be a big problem", said Jeanne Asseraf Bitton, head of cross-asset research at Lyxor Asset Management.
As reported at 10:21 am (JST) in Tokyo, the EUR/USD was trading at $1.21, up 0.08%, while the GBP/USD was at $1.3549, a gain of 0.08%.
Sterling fell 0.15 percent against the dollar to $1.3491 at 13:22 in London.
Later, the market will be keeping a close eye on the United States consumer price index (CPI) and retail sales releases, which may have some bearing on the dollar.
While the currency's rise has reflected growing optimism over the bloc's economic recovery, investors have flagged it as a potential brake on stocks.
The euro rallied against the greenback on Thursday after the European Central Bank said it could revisit its communication stance in early 2018, boosting expectations that policymakers are preparing to reduce their vast monetary stimulus programme.
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"Markets were a bit too complacent about bonds so they took some excuses to correct", she said.
They added: "The language pertaining to various dimensions of the monetary policy stance and forward guidance could be revisited early in the coming year".
The euro surged more than half of a percent against the dollar on the comments, with investors taking the relatively hawkish statement as a further signal that the European Central Bank will wind down its 2.55 trillion euro bond purchase scheme this year if growth continues to roar ahead.
Craig Erlam, senior market analyst at Oanda, said in a note: "If the reports turn out to be true and China no longer sees Treasuries as an attractive option, the repercussions could be significant as the country is one of the biggest holders of U.S. debt".
Benchmark 10-year notes gained 6/32 in price to yield 2.53 percent, after rising as high as 2.597 on Wednesday, the highest since March 15.
"It's not only for Japan, but for the European Central Bank and USA, that markets are sensitive about anything that suggests tapering", she said.
The US Dollar was broadly lower during Friday trade after disappointing US producer price inflation data.
The dollar index slipped to a six-week low, down 0.5%. It skidded over 11 percent in the previous session after the government of South Korea, a crucial source of global demand for cryptocurrency, said it was considering a plan to ban cryptocurrency trading. The energy sector led the gains as oil prices rose to three-year highs while interest rate sensitive sectors, such as utilities and real estate companies, underperformed.
Brent crude futures hovered at US$69.28 a barrel after hitting US$70.05 a barrel on Thursday, their highest level since November 2014, while U.S. West Texas Intermediate (WTI) crude futures stood at US$63.49, down 0.3 percent on the day.