The U.S. dollar is likely to test its topside against the yen this week, but unabated appreciation is unlikely to occur due to yen-supportive comments by Japanese officials and rising frustration with the weak yen in other Asian nations.
Markets will be paying close attention to any comments related to foreign exchange or the U.S. economy by U.S. Treasury Secretary Paul O'Neill while he is in Tokyo, dealers said.
O'Neill is scheduled to be in Tokyo until Thursday for an international conference on Afghan reconstruction and meetings with Japanese leaders.