The yen extended gains amid speculation Bank of Japan officials may discuss tightening its ultra-loose policy stance at its meeting.
USD/JPY fell as much as 0.6% to 138.71 before paring the move to 139.38. FX pair's implied volatility rises after Nikkei reports that BOJ officials would discuss letting yields rise above its current limit by a "certain degree." The report added to uncertainty around the BOJ's decision as majority of economists had projected the central bank would stand pat this week.
Dollar sell-stops are building below 137.25, the July 14 low and buy stops above 142, according to Asia-based FX traders.
The Bloomberg Dollar Spot Index was little changed while the two-year Treasury yield fell two basis points to 4.91%
AUD/USD fell 0.1% to 0.6700; NZD/USD eased 0.1% to 0.6176
Source : Bloomberg
