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The yen is the currency most sensitive to news on China and a break in the yuan's current peg, currently fixed at 8.28 to the dollar, is expected to make Japanese exports more competitive.
Markets are closely watching the G7 meeting in Washington this weekend to see what monetary officials have to say about oil prices and global imbalances.
Range for this week: Y106.75-Y109.80
Sterling
The week commenced on a positive note, with sterling having touched its highest level against the dollar in over a week, cheered by data showing an improvement in Britain's trade position and a pick-up in producer and house price inflation.
Britain's global goods deficit narrowed to 4.8 billion pounds in February from more than 5.0 billion in January, while companies' raw material costs surged in March, rekindling talk that higher interest rates may be needed to curb inflationary pressure.
British house price inflation picked up to an annual rate of 10.5 percent in February from 10.0 percent the previous month, easing fears of a sharp downturn in Britain's property market.
Sterling climbed to a high of $1.8976, its highest since April 1, as strong British retail sales data rekindled market speculation of an interest rate hike by the Bank of England. Retails sales grew by 1.8 percent in March after a 0.3 percent fall in February.
The BoE has left interest rates steady at 4.75 percent since August 2004, after raising them five times since November 2003. Many economists expect another interest rate hike once the May 5 general election is out of the way. However, the pound shed most of its gains after British unemployment saw its biggest monthly rise in nearly two years in March.
For the coming week, investors will watch U.K.'s first quarter GDP release, retail sales and inflation data for clues on how growth is holding up in an environment of global monetary policy tightening.
Range for this week: $1.8710-$1.9000
HSBC
