The dollar fell against the yen Monday in Asia amid speculation the U.S. Federal Reserve will likely cut its key interest rate this week.
The dollar was trading at 114.18 yen midafternoon, down from 114.22 yen late Friday in New York. The euro rose to US$1.4419 from US$1.4385.
Tokyo currency dealers said a 25 basis-point rate cut in Wednesday's Federal Open Market Committee meeting has already been "priced in." Their focus is on the Fed's post-meeting statement for clues about the U.S. central bank's future moves.
"We're interested in whether the Fed will continue to ease after this," said Katsunori Kitakura, a senior dealer at Chuo Mitsui Trust and Banking. "I believe the Fed will go on slashing rates."
Some markets have begun to factor in a 75 basis-point cut to 4.00 percent by the middle of next year, said Osamu Takashima, chief analyst at Bank of Tokyo-Mitsubishi UFJ.
Such easing actions on credit are probably necessary to prevent the subprime impact from crimping the U.S. economy further, traders said.
The yen may remain in a narrow range until Friday, when U.S. employment data are due, said Jun Kato, a senior dealer at Shinkin Central Bank.
In the Asian session Monday, the euro rose to a new all-time high of $1.4426. Traders said it may advance to $1.4450 later in the global day.
Against other regional currencies, the dollar was mixed, rising to 39.395 Indian rupees from 39.31 the previous day, and to 44.000 Philippine pesos from 43.850. It fell to 7.7506 Hong Kong dollars from 7.7508, and to 32.372 Taiwan dollars from 32.461.
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