The dollar stood tall against the yen in early Asian trade on Friday, not far from this week's seven-year high as investors continued to monitor whether Japan's leader would call an election and delay a sales tax hike.

The greenback was steady from late U.S. levels at 115.79 yen, with Tuesday's seven-year high of 116.11 in sight.

Investors are waiting to see if Prime Minister Shinzo Abe calls an early election to postpone an unpopular tax hike and seek a mandate on his economic reforms before his approval ratings slide. A senior ruling party lawmaker was quoted on Thursday as saying Abe had decided to do this.

Abe has said he will decide on whether to proceed with the planned October 2015 tax increase after seeing preliminary figures on third-quarter growth, due on Monday. The first increase in the two-stage sale tax hike in April took a significant toll on the Japanese economy, and many economists would welcome a delay in the second-phase of the tax hike as positive for growth.

Japanese companies overwhelmingly hope the tax increase will be postponed or scrapped, a Reuters poll showed on Thursday.

Election speculation has given a massive boost to Japanese stocks and weighed on the yen. The Nikkei stock average was up 0.6 percent in early trading on Friday, keeping pressure on the Japanese currency.

Many market participants, particularly foreign investors, sell the currency to hedge their equities positions.

"We believe that JPY corrections are likely to be more limited at this stage. Increased expectations of snap Japanese elections and delays implementing the sales tax hike currently support USD/JPY via a higher Nikkei," strategists at Morgan Stanley wrote in a note.

The dollar fell to a session low of 115.32 yen overnight, after U.S. data showed that new jobless claims unexpectedly increased last week, though they still stood near a 14-year low.

The euro was also steady on the day at $1.2473, holding well above a two-year low of $1.2358 hit a week ago.