The yen rose against most of its major peers before the Bank of Japan starts a two-day meeting tomorrow as investors weighed whether it will follow the Federal Reserve in expanding monetary easing. BOJ Governor Masaaki Shirakawa said on Sept. 6 that the yen’s appreciation causes a decline in Japan’s exports and that its negative effect is “dominant.” The U.S. central bank on Sept. 13 decided to expand its balance sheet with open-ended purchases of $40 billion a month of mortgage debt to bolster the labor market, following two rounds of a $2.3 trillion quantitative-easing program from 2008 to 2011.

The euro snapped a four-day advance versus the yen before a German report tomorrow that may show investor confidence remains weak in the region’s biggest economy. The ZEW Center for European Economic Research is forecast to say its German index of investor and analyst expectations, which aims to predict economic developments six months in advance, was minus 20 in September, according to a Bloomberg News survey of economists. The gauge slid to minus 25.5 last month, the lowest this year.

The Australian dollar weakened against 13 of its 16 most- traded counterparts. Demonstrators took to the streets in a dozen cities across China, Australia’s biggest trading partner, calling for Chinese sovereignty over islands that are also claimed by Japan.

Tensions escalated after Japan said last week it would purchase the territory from a private Japanese owner, prompting China to dispatch government vessels near the islands known as Senkaku in Japanese and Diaoyu in Chinese. Japan’s foreign ministry said yesterday that Shinichi Nishimiya died of an unspecified illness, five days after his appointment as an ambassador to China.

EUR/USD: during the Asian session, the pair traded in the range of $1.3100-40.

GBP/USD: during the Asian session, the pair traded in the range of $1.6210-30.

USD/JPY: during the Asian session, the pair traded in the range of Y78.15-45.

Scheduled data for Monday starts at 0800GMT, with the release of the ECB Jul current account data. Further eurozone data is expected at 0900GMT, with the release of the EMU July trade data and Q3 labour costs lso at 0900GMT, German Chancellor Angela Merkel holds a press conference, with the eurozone debt crisis expected to be a major topic of discussion. US data gets underway at 1230GMT, with the release of the September NY Fed Empire State Survey.