A Bloomberg News survey shows all of the 35 economists polled forecast the Bank of England to maintain its current policy this month, while investors are pricing a 3 percent chance for a 25 basis point rate hike.

The yen came into favor as risk aversion re-emerged on the back of concerns over the European banking system and Greek credit default swaps rising to a record high.

The Japanese yen outlook looks clouded as the currency re-couples with broad trends in risk sentiment even as confidence is pulled in opposing directions by the EU debt crisis and US economic data.

The Bank of Japan is widely expected to hold the benchmark interest rate at 0.10 percent next week as the world's second largest economy struggles to shake off the recession.

The economic docket for the following week is expected to show the trade surplus narrowed.

A pullback may be ahead if US labor market figures prove to bolster confidence in the week ahead.

The Japanese economic calendar is full of significant gauges for the economy but none will probably be market moving.

The Japanese yen after a week of volatility ended slightly lower against the dollar but marked gains against the euro and pound as the European debt crisis saw the safe haven currency benefit from increasing pessimism.

The Bank of Japan is scheduled to release its April meeting minutes on Monday, and the central bank is likely to maintain a cautious outlook for the region as the appreciation in the exchange rate continues to weigh on the prospects for future growth.

Domestic fundamentals rarely have an impact on the currency's price action, which was the case last week in spite of several major releases.