* Euro rises ahead of ECB's Draghi speech in Strasbourg
* Bank of Japan, China data feature this week
* Fed's Yellen to testify at Congress on Tuesday, Wednesday
By Anirban Nag
LONDON, July 14 The dollar edged up against the
yen on Monday, though stayed well within recent ranges, as
investors awaited Federal Reserve Chair Janet Yellen's
congressional testimony for cues on the outlook for U.S.
U.S. Treasury yields have fallen and Fed Funds futures
indicate investors are pushing back policy tightening
expectations after Fed minutes indicated the central bank is not
in a hurry to raise rates. So, a lot will depend on what Yellen
says, especially on the back of an improvement in U.S. data in
the second quarter.
In the euro zone, European Central Bank President Mario
Draghi addresses a European Parliament committee in Strasbourg
and the single currency's recent strength against the dollar
could be mentioned. ECB policymakers have in the past said that
the exchange rate's strength worsens the disinflationary
situation in the euro zone.
The euro was up 0.2 percent at $1.3635, lifted by
talk of buying by long-term investors in London trade, while the
dollar was up 0.1 percent against the yen at 101.50. The
euro rose 0.3 percent against the yen to 138.36 yen,
recovering from last week's five-month low of 137.50 yen.
"Investors are hoping for Yellen to say something
substantial. The Fed, it seems, will tolerate a bit more
inflation before it will tighten rates," Commerzbank currency
strategist Peter Kinsella said.
"The key is U.S. yields and if they are not moving higher,
it's unlikely to translate into anything substantial for the
dollar," he said.
Investors are also awaiting a policy review by the Bank of
Japan on Tuesday, though it is widely expected to maintain its
policy and its broader economic outlook.
The BOJ may trim its economic growth forecast for the
current year, sources familiar with its thinking said,
reflecting soft exports and a bigger-than-expected slump in
household spending after a sales tax hike in April, though the
change would not tip any policy changes to come.
"There hasn't been significant structural change that
requires measures from them," State Street Global Markets' head
of foreign exchange Bart Wakabayashi said.
"I'm surprised dollar-yen is as bid as it is," he said,
referring to what he said was a lack trading incentives.
Demand for the safe-haven yen faded on Friday as concerns
eased about the health of Portugal's largest bank and its impact
on the euro zone financial system.
Speculators increased their bullish bets on the U.S. dollar
in the latest week, with the value of the dollar's net long
position rising to $10.34 billion in the week through July 8,
according to the data from the Commodity Futures Trading
Commission released on Friday.
Meanwhile, the Australian dollar stabilised, after having
fallen late on Friday as the country's central bank chief again
said the currency was too strong.
In an interview with the Weekend Australian published late
last week, Governor Glenn Stevens reiterated that some investors
may be underestimating the risk of "a material decline" in the
currency at some point.
The Aussie last traded at $0.9398, having dipped as
low as $0.9370. Traders said a slew of Chinese economic data on
Wednesday could have a bearing on the Australian dollar, given
the Asian powerhouse is Australia's largest trading partner.
(Additional reporting by Lisa Twaronite in TOKYO; Editing by