The Japanese yen declined against its major counterparts in the European session on Monday, amid a monetary policy divergence between Japan and the United States.

The dollar index touched a 20-year high amid concerns over the energy crisis in the Europe and expectations of aggressive rate hikes by the Fed.

Strong jobs data released on Friday supported hopes of more interest rate hikes to bring down high inflation.

Markets expect another 0.75 percentage point rate hike at the Fed meeting later this month, according to CME Group.

Russia's decision to halt gas flows through the Nord Stream 1 pipeline indefinitely sparked risk aversion and supported safe-haven assets such as the dollar.

U.S. markets are closed on account of the Labor Day holiday.

The yen declined to 140.65 against the greenback and 161.79 against the pound, off an early high of 140.09 and a multi-week high of 160.66, respectively. The currency is likely to find support around 145.00 against the greenback and 164.00 against the pound.

The yen pulled back to to 106.95 against the loonie, 85.76 against the kiwi and 95.54 against the aussie, from its early highs of 106.58 and 85.17 and a 4-day high of 94.99, respectively. The next possible support for the yen is seen around 108.00 against the loonie, 87.00 against the kiwi and 97.00 against the aussie.

The yen was down against the franc, at a 6-day low of 143.31. Next likely downside target for the currency is seen around the 143.7 level.

Against the euro, the yen retreated from a 5-day high of 138.69, with the pair trading at 139.64. If the yen slides further, 141.00 is possibly seen as its next support level.

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