Japan’s yen moved away from Friday’s 148.80 per U.S. dollar, and reached 147.61, while the euro was 0.1% lower on the day at $1.0883

The U.S. dollar was little changed to modestly higher against rivals on Monday ahead of central bank policy decisions in Japan and the euro zone that may determine the currency’s direction this year.

Japan’s yen moved away from Friday’s 148.80 per U.S. dollar, its weakest in a month, and reached 147.61, as the Bank of Japan started its two-day policy meeting. The dollar was 0.1% lower against the Japanese currency at 148.06 yen.

Wagers for an exit from negative rates at this meeting have been wound down after the New Year’s Day earthquake in Japan, alongside dovish BOJ commentary.

BOJ Governor (Kazuo) Ueda is likely to tilt against anticipations for an April move out of negative-rates territory in the post-decision press conference, and the bank may lower its full-year inflation forecast, pulling the yen near the 150 threshold against the dollar, said Karl Schamotta, chief market strategist at Corpay.

The yen, which is sensitive to the difference in interest rates between the U.S and Japan, has been the worst hit against the dollar this year, dipping nearly 5% in a quick reversal of December’s surge to five-month peaks near 140.

It is incredibly unlikely they will (BOJ) actually touch their benchmark policy rate, but comments from currency officials are proving to once again have a bit of weight on the (dollar/yen) pair, said Helen Given, FX trader, at Monex USA.

We will have to see whether Ueda mentions FX pricing in his press conference after the decision. To put things into context though, this is a comparatively small retracement to the losses JPY has taken so far this year, Given said.

Traders said one factor also driving the yen moves was the expiry of a large amount of currency options during the week and the hedging around those contracts.

LSEG data showed strike prices between 147.15 and 148.10 dollar-yen levels this week totalled nearly $2.6 billion.

The ECB is also holding a policy meeting this week and is expected to leave rates unchanged at 4%, with European Central Bank officials saying it is too early for rate cuts. With the ECB likely to remain data-dependent, investors will focus on the policy statement and President Christine Lagarde’s press conference.

The euro was 0.1% lower on the day at $1.0883. Speculators pared back net long positions on the euro to their lowest since early November, data from the CFTC showed last Friday.

The dollar index was flat to marginally higher at 103.34. It has gained the most among developed market currencies in January, increasing nearly 1.8% from the start of this year. Its rally, however, has been up and down as investors try to make up their minds about when the Fed will start cutting rates.