Yen strength prevailed in the morning session, with USD/JPY briefly rising to around 157.22 before being pushed back to around 156.65. With the US FOMC and the Bank of Japan meeting scheduled for this week, market views are expected to remain divided.
In the morning Tokyo market, USD/JPY was bought up to around 157.22 at one point amid volatile trading, but yen buying subsequently prevailed and pushed the pair back to around 156.65. Concerns over a deterioration in the trade balance and energy import costs are believed to be having an impact.
The US Federal Open Market Committee (FOMC) is scheduled to meet on the 27th, followed by the Bank of Japan Monetary Policy Meeting from the 29th. Market nerves are expected to rise ahead of the central bank events.
EUR/USD rose as the euro strengthened to around 1.1227 on a gap higher, after which cross-yen pairs followed USD/JPY lower toward their lows. EUR/JPY reached the 176.35 level before softening to around 175.83.
AUD/JPY briefly rose to around 110.50 following comments from the RBA, but overall was pressured by the yen-strength trend and softened to around 110.09.