The yen trimmed losses from a day earlier when worse-than-expected Japanese economic data stirred expectations that the government would ramp up stimulus. The Aussie dollar edged lower after the release of Reserve Bank of Australia's minutes from its February meeting.

Trading was thin with many markets in Asia closed for the Lunar New Year holiday and following the President's Day holiday in the US Key economic events lie later in the week, with minutes from the Fed's last meeting and advance figures on US gross domestic product.

"We're quite positive on the US economy," said Kristina Clifton, senior currency strategist at Commonwealth Bank of Australia in Sydney. "The market is currently pricing a high chance of a June interest rate cut, which is also our view. However, we differ from the market in that we expect a follow-up cut in July."

"We judge that the most important driver of the dollar through 2026 will be the narrative of US exceptionalism," she added.

The dollar index, which measures the greenback against a basket of currencies, was little changed at 97.12, after a 0.2 percent gain in the previous session. The euro fell 0.06 percent to $1.1843.

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The yen strengthened 0.15 percent to 153.28 per dollar. Sterling weakened 0.07 percent to $1.3616.

Data on Friday showed US consumer prices increased less than expected in January, giving the Fed additional leeway for policy easing this year.

Money market traders are pricing in 62 basis points of easing for the rest of this year, implying two quarter-point cuts and about a 50 percent chance of a third. The next cut is likely in June, with markets assigning an 80 percent chance of a 25-basis-point reduction.

The Federal Open Market Committee issues minutes from its January meeting on Wednesday. Other key data points this week include inflation readings for Britain, Canada and Japan, as well as preliminary readings of global business activity on Friday.

A recent rally in the yen stalled on Monday when official figures showed Japan's economy barely grew last quarter, eking out an annualized 0.2 percent expansion.

The Australian dollar weakened 0.07 percent versus the greenback to $0.7064. New Zealand's kiwi weakened 0.08 percent to $0.6026 ahead of the Reserve Bank of New Zealand's policy meeting on Wednesday, when it is widely expected to hold rates steady.

Australia's central bank concluded inflation would stay stubbornly high if it had not hiked interest rates as it did this month and it was not yet sure if further tightening would be necessary.

Minutes of the RBA's board meeting last month showed members were worried that the risks to its inflation and employment mandates had "shifted materially."

In cryptocurrencies, bitcoin gained 0.05 percent to $68,881.72, while ether was little changed at $1,999.11.

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