The dollar is expected to trade within a narrow bracket this week, as a belief emerges that the war in Iraq could last months rather than weeks but with traders alert for intervention by the Bank of Japan.
In addition, traders will find it hard to move the yen-dollar rates sharply in either direction given signs of the deepening weakness of the Japanese and U.S. economies, with a spate of indicators due out this week likely to confirm their frailty.
Traders said they expect the dollar to trade between 118.50 yen and 122 yen this week, even at its maximum swing.