The Japanese yen dropped against its major counterparts in the European session on Monday, amid a divergence in monetary policies between the U.S. Federal Reserve and the Bank of Japan.

The U.S. dollar strengthened and bond yields climbed as comments from Federal Reserve Governor Christopher Waller dampened expectations for a pause on monetary tightening.

Waller said that Friday's inflation data was "just one data point" and central bank wants to see a run of CPI reports before stopping raising interest rates.

Although the central bank is likely to consider raising rates at a slower pace, it should not be estimated as a "softening" of stance on inflation, Waller added.

On the other hand, the BoJ has kept monetary policy ultra-loose to support Japan's economy and cautioned against a premature hike in interest rates.

The yen dropped to 93.88 against the aussie and 140.80 against the greenback, off its early highs of 92.91 and 138.80, respectively. The yen is seen locating support around 95.00 against the aussie and 144.00 against the greenback.

The yen was down at a 4-day low of 148.62 against the franc. On the downside, 150.00 is possibly found as its next support level.

The yen weakened to 165.67 against the pound and 144.85 against the euro, from its early highs of 163.68 and 143.47, respectively. The next possible support for the yen is seen around 168.00 against the pound and 146.00 against the euro.

The yen edged down to 85.45 against the kiwi and 105.86 against the loonie, after climbing to 84.73 and 104.70, respectively in prior deals. The yen is likely to face support around 87.00 against the kiwi and 108.00 against the loonie.

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