The US dollar rose to a more than seven-week high against the yen on Monday, supported by a rise in US Treasury yields, as traders waited on an impending Federal Reserve meeting for clues on whether US interest rates could rise again by year-end. The dollar was up 0.49 percent against the Japanese currency at 111.38 yen. "The dollar-yen is the most US interest rate-sensitive currency pair right now. With US yields creeping up, the dollar-yen is creeping up," said Greg Anderson, global head of foreign exchange strategy at BMO Capital Markets in New York.

US Treasury prices fell and yields climbed on Monday as investors looked towards the Fed's two-day policy meeting this week for signals on whether an additional interest rate hike is likely this year. The US central bank is widely expected to announce at the conclusion of its meeting on Wednesday that it will begin paring its massive portfolio of Treasuries and mortgage-backed securities, with the reductions likely to start this year.

Last week was the greenback's best against the yen since November, up 2.8 percent, as a rise in US yields bolstered its appeal against the low-yielding yen and data showing a pick up in US consumer prices helped kindle expectations that the Fed could hike rates again in December. The Bank of Japan also meets this week, although it is widely expected to maintain its massive asset buying campaign at a meeting on Thursday. The dollar index, which tracks the greenback against six major currencies, was little changed at 91.877.

Sterling hit a 15-month high against the dollar before retreating a notch as investors wound back some of last week's bets on a Bank of England rate rise ahead of a speech by that central bank's Governor Mark Carney. Carney will speak at 1500 GMT. The euro was 0.1 percent higher against the greenback at $1.1956. The euro hit a more than 2-1/2 year high against the dollar earlier in September.

Copyright Reuters, 2017