Investing.com - The U.S. dollar gave back some of last week's impressive performance against the Japanese yen in Monday's Asian session, but USD/JPY was mostly steady as traders seem to be expecting further easing from the Bank of Japan.
In Asian trading Monday, USD/JPY fell 0.03% to 88.13 after trading as high as 88.38. The pair was likely to find support at 86.54, Wednesday's low, and resistance at 88.40, Friday's high. Last week, the dollar gained 2.7% against the yen, propelling USD/JPY to its highest levels in two-and-a-half years.
Elsewhere, Japan's monetary base rose more-than-expected last month, official data showed on Sunday.
In a report, Bank of Japan said that Japan's Monetary Base rose to 11.8%, from 5.0% in the preceding month.
Analysts had expected Japan's Monetary Base to rise to 5.3% last month. The monetary base is closely linked to interest rates although Japan's interest have hardly any room to move lower.
Expectations look firm that Prime Minister Shinzo Abe and his Liberal Democratic Party will continue pushing the Bank of Japan to engage in unlimited monetary easing to suppress the yen. Those expectations have buoyed Japanese equities in recent weeks with some trades saying USD/JPY could rise to 100 later this year.
Later this week, Japan is scheduled to release official data on the current account, which is directly linked to currency demand.
After this week, the marquee near-term event for USD/JPY is the BoJ policy meeting on January 22. It is widely expected that the central bank will adopt Abe's inflation target of 2%. BoJ's current inflation target is just 1%, but Abe has threatened to revoke BoJ's independence if the bank does not fall in line with his easing and inflation desires.
Elsewhere, EUR/JPY fell 0.05% to 115.16 while AUD/JPY added 0.02% to 92.42.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.