Dollar pinned down as ECB and U.S. payrolls up this week

The dollar was flat against the yen and the euro in rangebound Asia trade Monday, as many investors refrained from taking strong positions ahead of potentially market-moving events later this week.

The greenback USDJPY, +0.00% was at ¥122.85, compared with ¥122.86 late Friday in New York, amid a mixture of buying and selling by Japanese companies related to end-of-month commercial trade settlement.

The U.S. currency remained steady amid expectations that the Federal Reserve will start raising short-term rates at its policy-setting meeting next month.

But investors largely remained on the sidelines ahead of the key events later this week, such as a European Central Bank policy meeting scheduled for Thursday and U.S. jobs data Friday.

“Ahead of a variety of events later this week, investors will likely stop making moves,” said FPG Securities chief executive Koji Fukaya.

“Focus is on the ECB event and the jobs data,” said Fukaya.

Investors showed muted reaction to speeches by Bank of Japan Gov. Haruhiko Kuroda in Nagoya, central Japan.

Kuroda said wage growth will remain slow if the central bank doesn’t try to meet its price stability target of 2% soon, countering the view that the bank may avoid escalating its reflation policy until salary gains accelerate.

But Fukaya said the dollar may hover around ¥123 for the remainder of the year, noting that investors have already shifted their focus to what will happen after the possible rate increase by the U.S. Fed. In addition, the yield on 10-year U.S. Treasuries TMUBMUSD10Y, +0.24% , which often reflects not only rate increases but also broader economic fundamentals such as growth and inflation, is now at around 2.2%-2.3%, below 2.5% in June when the dollar hit its year high of ¥125.86.

Amid widespread speculation that the ECB would expand monetary easing at the Thursday policy meeting, the U.S. currency was slightly stronger against the euro EURUSD, -0.0755% which declined to $1.0579 midday from $1.0594 late Friday. The common currency EURJPY, -0.05% was at ¥129.97 from ¥130.11.

The WSJ Dollar Index BUXX, +0.03% , a measure of the dollar against a basket of major currencies, was unchanged at 90.87.