Investing.com - The dollar was holding steady just below six year highs against the yen on Monday as the rally in the greenback paused ahead of the upcoming Federal Reserve meeting later in the week.
USD/JPY was trading at 107.20, hovering just below Friday’s highs of 107.38, the most since October 2008.
The pair gained 2.05% last week as expectations that the Fed is growing closer to raising interest rates continued to boost the dollar against the yen, with Japan’s central bank likely to stick to a looser monetary policy stance.
The Fed was expected to cut its asset purchase program by another $10 billion at its meeting on Wednesday, which would keep it on track for winding up the program in October, and to start raising interest rates sometime in mid-2015.
Data on Friday showing that U.S. retail sales rose in August and another report showing that consumer sentiment rose to a 14-month high in September underlined the view that the economic recovery is deepening.
The yen remained under pressure after Bank of Japan Governor Haruhiko Kuroda said late last week that the bank would be prepared to immediately loosen monetary policy or implement other measures if its 2% inflation target becomes difficult to meet.
Elsewhere, the euro slipped lower against the yen, with EUR/JPY down 0.21% to 138.89, off Friday’s two-month highs of 139.18.
The euro slid after data over the weekend showed that Chinese factory output and retail sale growth slowed in August, adding to concerns over a slowdown in the world’s largest economy.
The single currency dipped against the dollar, with EUR/USD edging down 0.07% to 1.2955, holding above the 14-month lows of 1.2858 hit early last week.