There was a rally for the Dollar against the Japanese Yen on Monday following a Bank of Japan report highlighting little need to conclude negative interest rates this month.

The Dollar reached a high of 146.46 Yen and, at the time of writing, was up by 0.78% to 146.08 Yen. This followed on from a sharp drop against the Yen last week when bets the Bank of Japan could end negative interest rates next week increased.

Officials at the Bank of Japan have not yet seen sufficient evidence that wage growth is robust enough to justify bringing an end to its ultra-loose monetary policy in December, according to a Bloomberg report.

The greenback's rise against the Yen drove the Dollar index – measuring the currency against major rivals – to rise 0.15% to 104.12.

"This isn't surprising. It just goes to show there isn't a free lunch when it comes to speculating on the Bank of Japan," said the head of FX analysis at Monex Europe, Simon Harvey.

"We think that January poses a more opportune moment rather than December. Next week's meeting is going to come in thinner liquidity positions. There isn't as much space to follow up in terms of navigating markets through the change in conditions."

Furthermore, the Euro was flat at $1.0761 at the time of writing, not too far away from Friday's more than three-week low of $1.0724, Reuters reports.

Investors are focused on US November inflation figures due to be published on Tuesday, followed by Wednesday's interest rate decision by the Federal Reserve. Both the Bank of England and the European Central Bank are setting rates on Thursday.

US inflation will have likely decelerated to 3.1% last month year-on-year from 3.2% in October, say economists. They forecast that the Fed will keep rates at the present 5.25% to 5.5% level for the third consecutive month.

US job growth accelerated in November, according to data released last Friday, whilst the unemployment rate declined to 3.7%, showing the labour market's resilience and challenging forecasts for Fed rate cuts in early 2024.