The yen strengthened against the dollar on Monday as signs the Bank of Japan will exit negative interest rates at its policy meeting next week contrasted with expectations for the Federal Reserve to cut rates in June.

The dollar index, which measures the currency against the yen and five other major rivals, stuck close to a nearly two-month low reached Friday, when monthly payrolls figures signalled a cooling U.S. labour market, keeping the Fed on track to ease policy.

Sterling pulled back sharply from a multi-month high, following its best week since November of 2022, amid bets the Bank of England will be slower to cut rates than the Fed or European Central Bank.

The greenback eased 0.17% to 146.82 yen , heading back toward the five-week low of 146.48 reached on Friday.

The dollar index was flat at 102.68, hovering not far from Friday's low of 102.33, a level not seen since Jan. 15.

Sterling slumped 0.7% to $1.2859, but after closing out Friday with a more than 1% surge to $1.2811, a level not reached since late July. The currency jumped 2.35% last week, capping a six-session win streak against the dollar.

The euro was little changed at $1.0944 after jumping as high as $1.0980 on Friday for the first time since Jan. 12. The ECB left rates at record highs last Thursday while cautiously laying the ground to lower them later this year.

Source : Reuters