After touching its highest level in more than a year at 111.67 on Friday, the USD/JPY pair fell sharply but managed to close the week above 111.00. Following a consolidation phase during the Asian session on Monday, the pair extended its correction and was last seen losing 0.2% on the day at 110.82. In the absence of significant fundamental drivers and high-tier macroeconomic data releases, the USD's market valuation drives USD/JPY's movements on Monday.

Despite a stronger-than-expected Nonfarm Payroll print for June, the unchanged Labor Force Participation Rate and the slightly higher Unemployment Rate put the greenback under bearish pressure ahead of the weekend. The US Dollar Index, which lost 0.3% on Friday, is currently posting small daily losses at 92.18. Financial markets in the US will be closed due to the Independence Day holiday on Monday and the market volatility is unlikely to pick up during the American session. On Tuesday, the Labor Cash Earnings and the Overall Household Spending data for May will be featured in the Japanese economic docket. Later in the day, the ISM Services PMI data from the US will be looked upon for fresh impetus.