On Friday, dollar jumped more than 1% to a one-month high against the yen after the Bank of Japan surprised the market announcing the introduction of the policy of negative interest rates, while investors await the publication of the latest US data on change in GDP in the fourth quarter.
At the end of the Asian trading session, USD/JPY pair hit 121.40, the highest since December 21; the pair subsequently was fixed at 120.73, jumping 1.62%.
The pair is likely to receive support at 118.53, the session low and resistance at 121.55, the high of December 21.
At the end of the meeting to determine the monetary policy, which took place on Friday, the Bank of Japan announced that it decides to reduce the interest rate to 0.1%, and noted that it intends to reduce the rate in the future if necessary.
The decision of the central bank was made in an attempt to reach the target of 2% inflation amid concerns on global economic slowdown and falling oil prices.
Meanwhile, investors monitor the release of the revised data on US economic growth in the fourth quarter, expected later today, after the Federal Reserve failed to provide enough information about rate hikes.
On Wednesday, at the end of the two-day meeting to determine the monetary policy, the Fed kept interest rates unchanged after its first increase in nearly a decade in December.
The Central Bank said that the US economy maintains moderate growth trajectory on the continued strengthening of the labor market, even amid the gradual recovery rate, however, it has not brought any clarity about the pace of its growth.
The dollar weakened after the release of statistical data on Thursday showing that the volume of pending home sales in the US increased last month less than expected, while orders for durable goods fell in December much more than expected.
The yen was also sharply lower against the euro: EUR/JPY jumped 1.18% to 131.50.