Yen falls ahead of Bank of Japan meeting
The yen fell sharply against other major currencies Monday ahead of the end of a two-day meeting of the Bank of Japan.
The dollar rose to 98.87 yen near 2200 GMT, up from 97.54 yen late Friday.
The euro jumped to 131.05 yen from 129.01.
The euro bought $1.3254, up from $1.3216 in the prior session.
The yen has been perhaps the world's most dynamic currency in recent months in light of the Japanese government's aggressive efforts to spur growth and defeat deflation.
On Monday, Japan's Nikkei 225 stock index rose 4.9 percent after Japanese data showed annualized economic growth came in at 4.1 percent in January-March, up from a preliminary reading of 3.5 percent for the first quarter and well ahead of many other industrialized economies.
"Rising equities in Japan tend to weigh on the yen, as institutional investors cycle out of safe-haven Japanese bonds and seek higher returning investments abroad," said Omer Esiner, chief market analyst at Commonwealth Foreign Exchange.
Monday's gains in the Japanese stock market and decline in the yen were a shift from recent days that has seen some sharp declines in Japanese stocks and a stronger yen.
"Given the sharp decline in the Nikkei and the volatility in the yen, we suspect that the central bank will be eager to stabilize the markets," said Kathy Lien of BK Asset Management.
Looking ahead to Tuesday's close of the Bank of Japan meeting, Lien said the central bank could extend the time-frame of its stimulus and increase the frequency of bonds purchased. But it could also make a minor operational "tweak" to the program, she said.
The dollar also picked up support against the yen in part because of an announcement by Standard & Poor's that it was raising its credit rating outlook of the US from "negative" to "stable."
However, the pound gained on the dollar, trading at $1.5573 late Monday, compared with $1.552 Friday.
The dollar gave ground to the Swiss franc, trading at 0.9341 compared with 0.9355.