Yen Surges to Seven-Month High as Dollar Falls

The Japanese yen surged to a seven-month high on Monday, driven by bets that the Bank of Japan will tighten its monetary policy. This move has caused the dollar to slide 1.14% against the yen to 154.42, its lowest since February. The yen's rise is attributed to expectations that Japanese investors may shift funds back home.

The focus now shifts to Friday's US inflation data, which will influence the Federal Reserve's decision on interest-rate hikes later in the month. This, in turn, will impact the direction of the dollar. The European Central Bank also meets on Thursday, with a widely expected rate hike for the euro zone.