Investing.com - The dollar edged lower against the yen on Monday in wake of dovish comments from a key Federal Reserve official, though hopes for waning geopolitical tensions in eastern Europe gave the greenback some support.
In U.S. trading, USD/JPY was down 0.16% at 107.47, up from a session low of 107.06 and off a high of 107.58.
The pair was expected to test support at 106.79, the low from Sept. 16, and resistance at 109.92, the high from Oct. 3.
The dollar has firmed against the yen and most other currencies in recent sessions on expectations for U.S. monetary policy to diverge with those in Europe and Asia.
While the U.S. is seen closing its monthly bond-buying programs this month and hiking interest rates in 2015, expectations that the Federal Reserve may take its time when tightening policy next year began to build on Monday in wake of dovish comments out of the U.S. central bank.
"If foreign growth is weaker than anticipated, the consequences for the U.S. economy could lead the Fed to remove accommodation more slowly than otherwise," Federal Reserve Vice Chair Stanley Fischer said in prepared remarks of a speech he delivered at the annual International Monetary Fund/World Bank meeting over the weekend.
Still, the U.S. currency saw some support on reports that Russian President Vladimir Putin ordered his troops to withdraw from their training exercises near the Ukraine border on Sunday.
Geopolitical issues often weaken the greenback by stoking fears a softer global economy will drag on U.S. recovery and delay interest rate hikes.
Meanwhile in Japan on Friday, the minutes of the Bank of Japan's Sept. 3-4 policy meeting showed that some members voiced concerns over possible adverse effects of additional stimulus measures, which continued to support the yen on Monday.
These concerns raised the prospect of the first policy split vote under BoJ Governor Haruhiko Kuroda's mandate, even as the central bank head continues to emphasize his readiness to take fresh action to meet the BOJ's 2% inflation target, if needed.
On Tuesday, the BoJ left monetary policy unchanged at its policy meeting, but acknowledged that declining domestic demand as a result of a sales tax increase in April was leading to economic weakness.
The yen, meanwhile, was down against the euro and down against the pound, with EUR/JPY up 0.28% at 136.18, and GBP/JPY trading up 0.19% at 172.52.