SYDNEY : Currencies were in limbo on Monday as holidays in most of Asia made for thin trading, while traders braced for a packed week of central bank meetings that would offer the latest guidance on future rate hikes across continents.

Activity in the foreign exchange markets was subdued due to the Labour Day holidays in Singapore, Hong Kong and mainland China. Japan, Australia, and New Zealand are the only centres open in Asia.

The Japanese yen slid 0.2 per cent to 136.67 per dollar on Monday, extending its post-BOJ slump. The Bank of Japan (BOJ) on Friday stood pat on its monetary policy, sending the yen 1.7 per cent lower in the biggest daily drop since early February.

The Australian dollar was also on the defensive on Monday, easing 0.1 per cent to $0.6610. The currency fell 1.1 per cent last week to a seven-week low of $0.6573, but has found strong support at the March trough of $0.6564.

The New Zealand dollar lost 0.3 per cent to $0.6172, giving back some of the impressive rally last week.

The kiwi jumped 2.3 per cent on the yen on Friday as the prospects of higher rates, with the Reserve Bank of New Zealand set to raise rates further this month, attracting some buyers.

Weighing on risk sentiment on Monday was the unexpected contraction in China’s manufacturing activity in April and news on the weekend that U.S. major banks including JPMorgan Chase & Co were vying to bid for First Republic Bank.

In the week ahead, the Reserve Bank of Australia is widely expected to extend a rate pause on Tuesday, the Federal Reserve is projected to raise rates by another 25 basis points on Wednesday and the European Central Bank could surprise with an outsized half-point increase on Thursday.

Goldman Sachs expects the Fed to signal a pause in June, after it delivers a quarter-point hike on Wednesday.

“The focus will be on revisions to the forward guidance in its statement,” analysts at Goldman said in a note to clients.

“Beyond May, we expect the FOMC to hold rates steady for the rest of the year, though several paths are possible, with much depending on how severely the bank stress affects the economy.”

Catching up with their overseas counterparts, Australia’s government bonds rallied on Monday.

Three-year yields slid as far as 12 basis points but have since trimmed losses and were last at 3.001 per cent, while 10-years were last down 5 bps at 3.335 per cent.