The U.S. dollar fell against the safe-haven yen on Monday as uncertainty surrounding a potential Federal Reserve rate hike this month fueled a selloff in riskier currencies, while speculation of a less-dovish Bank of Japan also helped the yen.
The dollar was last down 1 percent against the yen at 101.65 yen after falling as low as 101.73 yen, or just over a percentage point against the Japanese currency. Investors focused on a speech made by Fed Governor Lael Brainard, in which she said that, while economic progress continues, it would be wise for the Fed to keep monetary policy loose.
Brainard's speech, the last scheduled by a Fed member before the central bank's meeting on Sept. 20-21, was scrutinized to see if she maintains her dovish stance on rates or takes a more aggressive posture.
A number of top Fed officials have hinted at a possible rate increase at the central bank's meeting this month. Atlanta Fed president Dennis Lockhart said on Monday that current economic conditions warrant a "serious discussion" of whether to raise rates at next week's Fed meeting.