The Japanese yen depreciated against its major counterparts in the Asian session on Monday, as risk sentiment improved following a reduction in the key interest rate by the People's Bank of China to support a slowing economy.

The PBoC reduced the rate on the one-year medium-term lending facility by 10 bps to 2.85 percent and injected liquidity worth 700 billion yuan via the MLF.

The interest rate on the seven-day reverse repurchase agreement was trimmed by 10 bps to 2.1 percent and pumped 100 billion yuan of liquidity into the banking system.

The rate cut, which was larger than expected, came in the wake of a downturn in the property sector and virus crisis.

Official data showed that China's economy grew at a slower pace in the fourth quarter of 2021, rising 4.0 percent on year, down from the 4.9 percent growth posted in the preceding quarter.

The Bank of Japan will conclude its two-day meeting on Tuesday. The bank is expected to keep its policy unchanged, but raise its inflation outlook.

The yen weakened to a 4-day low of 114.52 against the greenback, from a high of 114.11 seen at 5 pm ET. The yen is seen finding support around the 116.00 level.

The yen dropped to 156.58 against the pound, 125.22 against the franc and 130.76 against the euro, off its early highs of 155.99, 124.76 and 130.23, respectively. Next key support for the yen is seen around 161.00 against the pound, 129.00 against the franc and 132.5 against the euro.

The yen reversed from its prior highs of 82.29 against the aussie, 77.64 against the kiwi and 90.91 against the loonie, declining to 82.57, 77.92 and 91.31, respectively. If the yen drops further, it may find support around 84.00 against the aussie, 80.00 against the kiwi and 93.00 against the loonie.

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