Investing.com– Most Asian currencies kept to a tight range on Monday as sentiment towards the region was dented by weak Chinese business activity data, while the dollar retreated amid some growing bets on an interest rate cut. 

A sharp downward revision in Japan’s first quarter gross domestic product also kept sentiment towards Asia largely negative, while the yen remained fragile and largely in focus over more potential government intervention. 

Chinese yuan weak, PMIs offer mixed signals 

The Chinese yuan remained weak on Monday, with the pair sticking to levels last seen in November.

Purchasing managers index data painted a mixed picture of the economy. on Sunday showed China’s manufacturing sector shrank for a second straight month in June.

But showed the sector growing at its fastest pace in three years.

The mixed signals came amid souring sentiment towards China, as trade jitters with the West and cooling optimism over stimulus measures kept selling pressure on the yuan high.

Broader Asian currencies, especially those with exposure to China, were in a tight range. The Australian dollar’s pair was flat, while the Singapore dollar’s pair and the South Korean won’s pair both firmed slightly. 

The Indian rupee’s pair saw some strength last week, and remained below record highs hit in June. 

Japanese yen fragile, USDJPY rises after GDP revision

The Japanese yen remained at its weakest levels in 38 years. The pair rose as far as 161.19 yen on Monday, and remained well above levels that had attracted government intervention in May. 

The Japanese government on Monday unexpectedly revised first-quarter data, with the reading now showing a much deeper contraction than initially expected. 

The reading presented a dour outlook for the Japanese economy, and also raised doubts over just how much headroom the Bank of Japan has to begin tightening policy.

This notion has been a key weight on the yen, with recent dovish signals from the BOJ being a main driver of the currency’s rout through June. 

Dollar retreats, more rate cues awaited

The and both fell more than 0.2% each on Monday, extending losses from Friday after data showed some mild easing in inflation.

The reading saw traders increase their bets that the Federal Reserve will cut rates by 25 basis points in September, according to the .

Focus this week was squarely on more signals from the Fed. Chair Jerome Powell is set to talk on Tuesday, while the are due on Wednesday.

data for June is due on Friday.