The Japanese yen has surged to a 2.5-month high, trading at 152.65 per dollar as the Bank of Japan (BoJ) prepares for a pivotal policy meeting that may result in a short-term interest rate hike to around 0.25% and a reduction in bond purchases. This rise is attributed to Tokyo's intervention and the unwinding of short-yen carry trades, with analysts suggesting that a hawkish stance from the BoJ could further strengthen the yen. Meanwhile, the US dollar has shown some recovery amid expectations of the Federal Reserve maintaining interest rates, although the dollar index is set for a monthly decline. The Australian dollar remains stable as investors await key economic indicators and the Fed's decision, with inflation data expected to show a steady increase. Broader Asian currencies are under pressure from concerns over China's economic slowdown and a cautious market sentiment ahead of significant central bank announcements. Overall, traders are closely monitoring the outcomes of the BoJ and Fed meetings this week, which could have substantial implications for currency markets.