The Japanese yen slipped against its major rivals in the European session on Monday, as European shares rose after China's service sector activity expanded at a faster pace than expected in August.

Data from the National Bureau of Statistics showed that non-manufacturing purchasing managers' index rose to 55.2 in August, up from 54.2 in July. Economists had forecast the reading to remain unchanged at 54.2.

Oil prices rallied amid a weaker dollar and on global stimulus measures to contain the damage from the coronavirus pandemic.

Japanese Chief Cabinet Secretary Yoshihide Suga is to join the race to succeed Prime Minister Shinzo Abe, local media said, raising hopes he would extend the fiscal and monetary stimulus that defined Abe's term in government.

Data from the Ministry of Land, Infrastructure, Transport and Tourism showed that Japan's housing starts declined further in July.

Housing starts decreased 11.4 percent year-on-year in July, following a 12.8 percent fall in June. Economists had forecast an annual 12.5 percent decline.

Data from the Cabinet Office showed that Japan's consumer confidence fell marginally in August.

On a seasonally adjusted basis, the consumer confidence index increased to 29.3 in August from 29.5 in July.

The yen dropped to 117.27 against the franc and 105.96 against the greenback, off its early highs of 116.41 and 105.29, respectively. The yen is poised to challenge support around 119.5 against the franc and 108 versus the greenback.

After rising to 125.39 against the euro and 80.39 against the loonie in early deals, the yen weakened to 126.24 and 81.08, respectively. The next possible support for the yen is seen around 129.00 against the euro and 82.5 against the loonie.

The yen fell to 71.30 versus the kiwi, its lowest level since July 23. The currency is likely to find support around the 72.00 region. The yen reached as low as 77.93 against the aussie, compared to Friday's closing value of 77.60. If the yen extends drop, 80 is possibly seen as its next support level.

The Japanese currency was trading lower against the pound, at 141.03. On the downside, 145.00 is possibly seen as its next support level.

Looking ahead, at 8:00 am ET, German preliminary CPI for August is scheduled for release.

Canada building permits for July are due in the New York session.

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