The yen hit one-week lows versus the dollar and euro on Monday on growing expectations interest rates would stay near zero even after an end, perhaps as early as this week, to the Bank of Japan's ultra-easy monetary policy. Market players grew cautious as political opposition to the end of "quantitative easing" intensified, underscoring the view that the central bank is unlikely to start raising interest rates from current near-zero levels until later in the year. Analysts said interest rates spreads between the yen and the dollar or euro were unlikely to move dramatically in favour of the Japanese currency any time soon. Such spreads have been a major driver of the foreign exchange market over recent months. "The market is now beginning to look beyond the potential first step in terms of a shift from quantitative easing to interest rate targeting," said Derek Halpenny, currency economist at Bank of Tokyo Mitsubishi. "Given the rhetoric we've seen from the government today, the pressure, beyond moving away from quantitative easing will be very, very much on the BOJ to maintain a zero interest rate structure," Halpenny added. Japanese Prime Minister Junichiro Koizumi urged the BOJ on Monday to be prudent about its policy making, in order not to spoil a hard-won economic recovery. Vice Finance Minister Koichi Hosokawa, in a tacit warning against an expected near-term policy change, said he thought the central bank was well aware of the importance of overcoming deflation. The dollar rose to a one-week high of 117.32 yen after hitting a one-month low of around 115.45 last week. By 1240 GMT, the dollar was changing hands at 117.26 yen, up 0.7 percent on the day. The euro was up 0.6 percent at 140.96 yen. The yen was also pressured by potential investment flows out of the Japanese currency, some analysts said.