The Japenese yen traded stronger in early Asian trade on Monday.
USD/JPY traded at 104.03 down 0.02%, with the Tokyo market lightly staffed on a public holiday.
Elsewhere, NZD/USD traded at 0.8205 up 0.11% and AUD/USD traded at 0.8921 down 0.03%.
Last week, USD/JPY rose to 104.64, the highest level since October 2008, before turning lower to settle down 0.14% at 104.03 as investors locked in profits.
Following a two-day meeting, the Bank of Japan on Friday kept its pledge to expand the monetary base by an annual JPY60 trillion to JPY70 trillion, in line with expectations.
Last week, the U.S. dollar ended the week higher against most of its major counterparts.
This week the trading volumes are expected to remain light due to the Christmas holiday. The Fed announced on Wednesday that it would reduce its USD85 billion-a-month bond buying program by USD10 billion in January. In his last press conference as Fed Chairman Ben Bernanke said the economy was continuing to make progress.
The U.S. central bank reiterated that interest rates are likely to remain low even after the unemployment rate drops below 6.5%, the threshold at which the Fed has previously said it would start to consider rate increases.
The Commerce Department said Friday that the U.S. economy expanded by 4.1% in the third quarter, well above initial estimates for 3.6% growth.
Meanwhile EUR/USD fell to 1.3625, the weakest level since Dec. 6, before turning higher to end up 0.07% at 1.3671.
Standard & Poor''s cut the European Union''s long-term credit ratings to ''AA+'' from ''AAA'' over concerns that E.U.''s financial profile has deteriorated while cohesion among E.U. members has lessened, though the euro shrugged off the news.
Coming up on Monday, the U.S. is to produce government data on personal spending and expenditure, while the University of Michigan is to release revised data on consumer sentiment and inflation expectations.
Meanwhile, Canada is to release monthly data on gross domestic product, the broadest indicator of economic activity and the leading measure of the economy’s health.
Jerusalem Post Annual Conference. Buy it now, Special offer. Come meet Israel's top leaders