Yen weakens in Asia as Bank of Japan starts meeting

TOKYO: The yen weakened in Asian trade Monday as the Bank of Japan kicked off a two-day policy meeting, with investors also eyeing testimony from the head of the US Federal Reserve later this week.

In Tokyo afternoon trading the greenback rose to 101.40 yen, up from 101.23 yen in New York on Friday, while the euro strengthened to 137.95 yen from 137.78 yen in US trading.

The euro was nearly flat against the dollar at $1.3602 from $1.3604.The Japanese central bank was widely expected to stand pat on any fresh policy moves after its meeting wraps up Tuesday.

But investors are increasingly betting on the likelihood that the BoJ will make a move later in the year after growth slowed following a sales tax rise in April -- more monetary easing by the BoJ would likely further weaken the yen.

Markets are also eager to see what Federal Reserve chair Janet Yellen says to Congress about the state of the US economy and the likely timeline for raising interest rates as the central bank winds down its five-year stimulus campaign.

Yellen is to deliver the bank´s semi-annual report on the economy and monetary policy to Congress on Tuesday and Wednesday. Fresh data including US factory output and retail sales are also due this week.

"On the calendar there is plenty to digest this week," Credit Agricole said.

"Hard data in the US, including retail sales (Tuesday), industrial production (Wednesday) and a pack of housing data, likely improved further."