The yen extended recent gains to a one-month high against the dollar and a six-week peak versus the euro on Monday as expectations rose Japan will soon end its ultra-easy monetary policy and eventually raise interest rates. Japanese Economics Minister Kaoru Yosano said on Sunday the Bank of Japan should feel free to end its easy policy, raising speculation that the government -- which long warned against a premature shift -- is now supporting the move. Investors expect the BOJ could start the process of an exit from its five-year-old policy of flooding the financial system with excess cash as early as next week's meeting. Analysts say the yen's rally is more to do with investors closing their yen carry trades as the BOJ's move is unlikely significantly to improve interest rate spreads between the yen and the dollar or the euro. "Now the BOJ is more adamant about the need for tightening the policy and finally the government is beginning to agree," said Mansoor Mohi-Uddin, chief currency strategist at UBS. "This is at margin positive for the yen especially as short-term players unwind their yen short positions, although interest rate differentials will stay in favour of the dollar." By 1240 GMT, the dollar was down 0.5 percent at 116.18 yen having hit a one-month low of 115.68 earlier. The euro hit a six-week low of 137.20 yen before trimming losses to 137.75, still down 0.7 percent on the day. The euro was down 0.1 percent on the day at $1.1853, having earlier fallen to its weakest levels since Jan. 3, while the dollar hit a three-month high of 1.3228 Swiss francs.