The yen underperformed against its major peers amid expectations that Bank of Japan policymakers will leave the negative-rate policy in place when concluding a two-day meeting on Tuesday.
USD/JPY's one-week implied volatility held near the highest level since July 28 when the BOJ unexpectedly doubled the ceiling for 10-year yields. The authority is widely expected to keep the world's last sub-zero rate intact on Tuesday, with investors set to scour comments for hints on if — and when — the BOJ might scrap the policy next year.
New Zealand's dollar climbed for a fifth day. Exporter demand took out option-related selling attached to 0.6200 option strikes, according to Asia-based FX traders.
"We judge markets have priced in some modest chance of BOJ tightening this week," Commonwealth Bank of Australia strategists led by Joseph Capurso wrote in a research note. "As such, the absence of any hawkish policy actions or comments by Governor Ueda will likely push USD/JPY up".
USD/JPY rose 0.1% to 142.32 after gaining 0.2% on Friday.
NZD/USD advanced 0.2% to 0.6219 after climbing as much as 0.4% earlier.
Bloomberg Dollar Spot Index edged up 0.1%.
Yields on Treasury 10-year notes added 2 basis points to 3.93%.
Source : Bloomberg
