Yen Surges to Seven-Month High as Traders Rethink Outlook

The yen surged to a seven-month high on Monday as traders reassessed its outlook due to expectations of faster Bank of Japan policy tightening and growing bets that Japanese investors could repatriate funds.

The main event this week is Friday's U.S. inflation report, which could shape the Federal Reserve's decision on whether to raise interest rates later this month and influence the dollar's direction.

The European Central Bank also meets on Thursday and is widely expected to raise euro zone interest rates.

Lee Hardman, senior currency analyst at MUFG, said the dollar's break below 155 yen seemed to have reinforced traders' bullish views on the Japanese currency.