The US currency was down 0.3 per cent at 109.94 yen, following a retreat to 109.740, its weakest since June 15. Core prices had been expected to rise by 0.2%.
"With European, U.S. and Asian markets all suffering heavily in anticipation of a potential conflict in Asia, it is worthwhile noting that we have heard similar posturing between Trump and Kim Jong Un before", said Mahony.
After touching a more than two-month high, spot gold last added 0.1 percent to $1,287.18 an ounce.
The S&P/TSX composite index was down 39.02 points to 15,217.33, with most sectors finishing in the red while bullion stocks surged almost 1.9 per cent.
But the yen added to an already-strong weekly rally of close to 1.5 percent, hitting its highest in nearly four months versus the dollar at 108.73 yen.
The Standard & Poor's 500 index fell 7 points, or 0.3 percent, to 2,467.
The greenback also came under pressure after New York Federal Reserve President William Dudley cautioned it would "take some time" for United States inflation to reach the bank's two percent target, the latest warning price pressures remain muted. For the week, the index lost over 3% to register its biggest weekly loss since February of 2016.
"Most investors will be completely out of their depth in making any assessment on the (North Korea) situation", said Koon Chow, emerging market FX strategist at fund manager UBP.
Switzerland's franc on Wednesday posted its biggest single-day rise against the euro since the central bank removed its cap on the currency in January 2015.
They were at 2.201 percent early on Friday.
Australian shares fell to near three-week lows in a broad-based selloff.
Innogy shares have moved to the downside after German utility maintained the outlook on the current year's business performance after reporting a drop in first-half net income to 817 million euros from 1.08 billion euros last year. Old Mutual has also fallen on news the British financial services firm, which is in the middle of breaking up into four parts, plans to list two divisions in 2018.
The British pound bought $1.3008, up slightly from $1.2993 late Tuesday in NY.
Markets are now awaiting U.S. consumer price data for July, due later in the session.
At 9:40 am ET, Dallas Federal Reserve President Robert Kaplan is due to speak at the University of Texas at Arlington Accounting Department Sixth Annual CPE Day in Arlington, Texas.
South Korea's fell 1.7 percent to its lowest since May 24, but its losses for the week are a relatively modest 3.2 percent.
The dollar weakened after news that US producer prices unexpectedly fell in July, recording their biggest drop in almost a year and pointing to a further moderation in inflation that could delay a Federal Reserve interest rate increase.
Publishing company News Corp (NWSA) reported fiscal fourth quarter earnings that beat estimates, although its revenues fell short.
Small-company stocks fell more than the rest of the market Wednesday.