The U.S. dollar will likely stay firm against the yen this week, given the weak state of Japan's economy and the market consensus that the yen will be kept under pressure until the nation's economy shows signs of recovery.
Dealers predict the dollar will likely hit the psychologically important 135 yen level sooner or later, because market participants are developing expectations that the U.S. economy is on a recovery path after Thursday's upbeat comments by Federal Reserve Board Chairman Alan Greenspan.
They also say the dollar-buying trend will continue because Greenspan's comments helped shape market views that the Federal Open Market Committee will leave the federal funds target rate unchanged at 1.75 percent during a two-day meeting beginning Tuesday.