The yen was a tad softer against the dollar in trading thinned by a Japanese holiday on Monday, with market participants still ambivalent about the odds of a big Fed rate cut next month.

The respite follows a tumultuous week that began with a massive selloff across currencies and stock markets, driven by worries over the U.S. economy and the Bank of Japan's hawkishness.

Last week ended calmer, with Thursday's stronger-than-expected U.S. jobs data leading markets to pare bets for Federal Reserve interest rate cuts this year.

Still, investors remain unconvinced the Fed can afford to go slow with rate cuts, and their pricing of 100 basis points of easing by year end, as per the CME Group's FedWatch tool, corresponds to a recession scenario.

That leaves markets highly vulnerable to data and events, notably U.S. producer and consumer prices numbers due on Tuesday and Wednesday respectively this week, the global central bankers' meeting at Jackson Hole next week and even earnings from artificial intelligence darling Nvidia later in the month.

"It's more a case of market squaring up a little bit ahead of the U.S. inflation data," said Christopher Wong, currency strategist at OCBC Bank in Singapore.

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