The dollar pared earlier gains versus the yen on Monday as traders took profits following the US currency's advance last week on positive jobs news that raised prospects for an interest rate rise later this month.
Earlier in the session, the dollar hovered near a two-and-a-half-week high against the yen despite the yen's temporary strengthening on Japanese corporate capital spending data, which was better than expected.
But while Friday's data showed US non-farm payroll jobs rose by 144,000 in August, close to a forecast of 150,000, the dollar lacked momentum to advance strongly, partly because US markets are closed on Monday for a public holiday.
Traders were reluctant to take large positions with a sparsely of major economic events apart from German industrial orders for July due out later in the day.
"The payrolls data provided relief and prompted players to lock in profit at levels above 110 yen," said Yukihiro Shimoyamada, a currency trader at UFJ Bank.
"The dollar's rise was due largely to short-covering and it remained under selling pressure because many are long in yen. But the dollar is well-supported with buying interest seen when it dips below 110 yen, keeping the currency in ranges," he said.
The dollar was around 110.30 yen down from late Friday's US level of 110.47 yen and below a two-and-a-half-week high of 110.70 hit on Friday.
The euro was around $1.2055 little changed from late US levels, after falling about one percent in New York.
The job figures bolstered expectations of another rate rise by the US Federal Reserve when its policy makers meet on September 21, although debate continued on the extent of a recent slowdown in the US economy.
"The jobs data almost made it a done deal that the Fed will raise rates by 25 basis points this month, but the market is now looking for clues on whether the Fed will keep increasing rates at every meeting for the rest of the year," said Kikuko Takeda, a manager at Bank of Tokyo-Mitsubishi.
Higher US rates are positive for the dollar as they could attract more funds to US debt instruments. If the Fed raises rates later this month, it would be the third increase this year. An expected rise of 25 basis points would bring its federal funds target rate to 1.75 percent.
After September, there are two more policy-setting meetings before the year-end. Market players said the jobs data made a federal funds rate of 2 percent by the year-end seem likely.
The yen rose temporarily after Japanese capital spending data released early on Monday that beat market expectations, prompting some Japanese exporters to convert dollars earned overseas into yen.
The dollar briefly fell to 110.30 yen but quickly rebounded.