Asian currencies traded mixed Monday as the U.S. dollar extended losses ahead of the Federal Reserve policy meeting. The Japanese yen surged to two-month highs, rising over 1% against the dollar, driven by speculation of coordinated intervention from U.S. and Japanese authorities. Markets are reacting to official communication and pre-intervention checks by U.S. officials.

The U.S. Dollar Index fell 0.5% to its lowest since mid-September. Investors are pricing in a potential Fed pause this week, though Chair Jerome Powell’s guidance on future rate cuts will be critical. Meanwhile, the Singapore dollar hit a decade low, and the South Korean won and Chinese yuan also weakened, reflecting broader dollar pressure.

The yen’s sharp reversal follows weeks of bearish positioning, fueled by expectations of aggressive fiscal spending under Prime Minister Sanae Takaichi. The currency had previously slumped to 18-month lows. Traders are now watching U.S. President Donald Trump’s upcoming Federal Reserve chair nominee for clues on future policy direction.