[NEW YORK] The yen strengthened slightly on Monday while the dollar lost ground against the euro ahead of the parallel policy meetings of the Bank of Japan and the US Federal Reserve.
After a week of disappointing data on consumer spending and inflation, the Fed is expected to hold its benchmark interest rate unchanged yet again and set its sights on a December rise.
Meanwhile the BoJ, still frustrated about the outcome of its substantial stimulus efforts, is thought to be mulling cutting interest rates deeper into negative territory to kick-start economic activity.
"The thinking seems to be... that the Bank of Japan is going to offer some easing this week and in the meantime the Fed is not expected to raise rates," said Chris Low of FTN Financial.
The dollar slipped to US$1.1175 per euro, and to 101.88 yen.
The pound picked up slightly at US$1.3028.