Asian currencies weaken as dollar rises, yen holds near seven-month high

Asian currencies weakened against the U.S. dollar on Monday as traders increased bets on a Federal Reserve rate hike this week, while the Japanese yen held near a seven-month high. The U.S. dollar index rose 0.2% to 99.35, while the yen remained near 154.03, its strongest since February. The yen's 4% gain this month has started to change market positioning, with speculators turning net long for the first time since February.

The Bank of Japan is expected to deliver another 25-basis-point hike on Friday, but markets have almost fully priced that move, leaving guidance on the pace of subsequent tightening as the key question for the currency.

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