Investing.com - The dollar dipped against the yen on Monday after soft U.S. housing data prompted investors to sell the greenback for profits and snap up nicely-priced positions in the yen, which has fallen in recent session on sentiments for U.S. and Japanese monetary policies to diverge
In U.S. trading, USD/JPY was down 0.11% at 108.95, up from a session low of 108.67 and off a high of 109.20.
The pair was expected to test support at 106.79, last Tuesday's low, and resistance at 109.45, Friday's high.
The National Association of Realtors reported earlier that existing home sales in the U.S. unexpectedly fell 1.8% to an annual unit rate of 5.05 million in August. Analysts had expected existing home sales to rise 1% to 5.20 million units, and the soft numbers sent investors selling the greenback for profits.
The yen saw support on sentiments that despite the likelihood that U.S. monetary policy while tighten while Japan's will stay loose or loosen further, the Japanese currency was oversold.
Bank of Japan Governor Haruhiko Kuroda said recently monetary authorities would be prepared to immediately loosen monetary policy or implement other measures if its 2% inflation target becomes difficult to meet.
Recent data revealed that Japan’s second-quarter economic contraction was larger than initially estimated, and another report showed that the country’s current-account surplus fell short of expectations in July.
The lackluster data indicated the economy is struggling to gain momentum and fueled expectations for more stimulus from the Japanese central bank.
The yen, meanwhile, was up against the euro and down against the pound, with EUR/JPY down 0.15% at 139.74, and GBP/JPY trading up 0.23% at 178.03.
On Tuesday, Japan is to release its latest manufacturing purchasing manager's index.