SYDNEY, Nov 21 (Reuters) - The U.S. dollar paused for breath on Friday as its recent rapid ascent on the yen attracted profit taking, though the market mood remains bullish on the currency given the outperformance of the U.S. economy.
The dollar had set up camp at 118.21 yen to be within easy walking distance of the seven-year peak of 118.96, while the euro levelled off at 148.17 from a top around 149.12 .
Having climbed almost 10 yen since the Bank of Japan sprang its surprise easing in late October, the dollar was overdue some consolidation if not a correction.
"Still, the overall upside risks are intact with near-term pullbacks finding support at 117.05/00, before the 115.45/114.89 zone," wrote analysts at JPMorgan in a note to clients.
"In this regard, the push above the 117.95 late-2007 high turns the focus to the critical range of targets in the 120/122.85 zone."
The latter is crowded with major chart levels and could prove tough to break at the first attempt.
Figures out of the U.S. on Thursday were generally upbeat led by a stunning jump in the Philadelphia Fed survey of manufacturing which soared to its highest since 1993.
Inflation also surprised on the upside, with the core consumer price index nudging up to 1.8 percent for the year.
That should be a welcome development for many at the Federal Reserve who have been worried that inflation could stay too low for too long.
In contrast, data out of Europe was mostly weak with manufacturing surveys missing forecasts across the continent. The divergence in economic fortunes saw the euro ease back to $1.2539 and away from the week's high of $1.2599.
The data cupboard is bare for Friday but European Central Bank chief Mario Draghi and Bundesbank head Jens Weidmann are both due to speak at the European Banking Congress in Frankfurt. (Reporting by Wayne Cole; Editing by James Dalgleish)