Investing.com - The yen weakened slightly in Asia on Monday with upbeat month machinery orders having little effect on sentiment as the focus falls squarely on the Fed meeting this week.
USD/JPY changed hands at 115.44. up 0/06%, while AUD/USD traded at 0.744, flat.
Japan reported core machinery rose for the first time in three months by 4.1% month-on-month, handily beating a 1.0% gain seen, but orders plunged 5.6% year-on-year, more than the 4.5% drop seen, while producer prices dipped 2.2% year-on-year, a tick more than the 2.3% drop expected.
The Fed kicks off a two-day review of rates on Dec. 13 where it is widely expected to hike rates for the first time in a year and give an updated timetable on expected moves in 2017.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was last quoted at 101.60.
Last week, the dollar rose against the other major currencies on Friday amid widespread expectations that the Federal Reserve will hike interest rates at the conclusion of its policy meeting this week.
Little doubt now remains that the Fed will hike rates for the first time in a year on Wednesday, with investors pricing in a 100% chance of an increase, according to federal funds futures tracked Investing.com's Fed Rate Monitor Tool.
Higher rates boost the dollar by making the currency more attractive to yield-seeking investors. The dollar surged against the yen, with USD/JPY up 1.18% to 115.36 late Friday, the strongest level since Feb. 9.
Meanwhile, the euro was lower for a second day after the European Central Bank said Thursday it would extend its bond-buying stimulus program for an additional nine months, even as it cut back on the size of asset purchases scheduled to end in March 2017, and will reduce it to €60 billion as of April. The asset purchases will continue at a pace of €60 billion per month until the end of December 2017, or beyond, if necessary, the ECB said.