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The yen rallied from the lowest level in more than four years against the dollar as technical indicators signaled its recent decline was too rapid. The yen's 14-day relative strength index versus the dollar yesterday fell below the 30 level which indicates an asset price has fallen too rapidly and it may be poised to reverse course. The Japanese currency's RSI against the euro was at 33.

The yen touched the weakest since October 2008 yesterday as the U.S. economy showed continued signs of recovery and Treasury yields touched a seven-week high. U.S. 10-year Treasury yields touched 1.94 percent yesterday, the highest level since March 26. The MSCI Asia Pacific Index of stocks gained 0.4 percent today.

The euro advanced today, snapping a three-day decline, before data forecast to show German investor confidence rose this month. The ZEW Center for European Economic Research in Mannheim will probably say its index of investor and analyst expectations, which aims to predict economic developments six months in advance, rose to 40 from 36.3 in April, according to the median estimate of economists surveyed by Bloomberg News before the data today.

The Australian and New Zealand dollars climbed as gains in Asian stocks boosted demand for riskier assets.

EUR / USD: during the Asian session, the pair rose to $ 1.3025

GBP / USD: during the Asian session, the pair rose to $ 1.5330

USD / JPY: during the Asian session, the pair fell to Y101.35

Monday's calendar gets underway with a speech by Philadelphia Federal Reserve Bank President Charles Plosser, talking on the on the economic outlook in Stockholm. Also at 0600GMT, Germany's April final HICP data and the April wholesale prices index. HICP could well show easing price pressures thanks to recent falls in the oil price. On month, HICP is seen down 0.5%, up 1.1% y/y. At 0645GMT, the French March current account numbers will cross the wires, followed by Spanish April final HICP numbers at 0700GMT and Italian HICP data at 0800GMT. At 0800GMT, the IEA monthly oil market report will cross the wires. At 0900GMT, the EMU March industrial output data and the German May ZEW survey will be released. The latest ZEW survey for May will be released on Tuesday morning, which may well give us a first taste of the impact of the recent ECB policy action and the promise of more of the same on business sentiment in Germany. Analysts are looking for the sentiment indicator to come in at 40.0 and Store Sales for the May 11 week are due for release. At 1600GMT, ECB Executive Board member Joerg Asmussen will deliver a speech on the future of banks, in Berlin.