The U.S. dollar slipped against the yen on Monday as traders took profits from the greenback's recent rally against the Japanese currency, while the dollar weakened against other major currencies on expectations for a dovish Federal Reserve meeting.
The dollar hit a session low of 110.85 yen after reaching a more than three-week high of 111.90 yen. Analysts said traders were taking profits and selling the dollar despite expectations that the Bank of Japan could increase its stimulus measures on Thursday after a policy meeting.
"It's profit-taking from the Friday move," said Jason Leinwand, managing director at derivatives advisory firm Riverside Risk Advisors in New York. "The market was definitely thinking the BoJ is going to increase stimulus."
While the dollar hit 111.90 yen early Monday, the majority of the dollar's recent climb against the yen came Friday, when the dollar rallied more than 2 percent against the yen. That rally was triggered by a Bloomberg report that the BOJ is considering applying negative rates to its lending program for financial institutions.