The yen fell against the euro and dollar on Monday, eroding last week's gains, as expectations grew that a possible Bank of Japan interest rate hike this week was unlikely to change the yen's appeal as a funding currency. With much of Asia shut for Chinese New Year celebrations, and the United States marking the Presidents' Day holiday, currencies were likely to remain in tight ranges ahead of the BOJ decision and U.S. inflation data on Wednesday. Investors are pricing in an around 60 percent chance of a BOJ rate hike to 0.5 percent after last week's strong domestic growth data which also triggered broad-based yen buying. But speculation lingered that the BOJ could come under political pressure not to raise rates. "The market is not convinced about any policy change. It's a 50-50 split whether BOJ will tighten rates. It's ebbing and flowing. Without (rate) futures selling off further in the next 24 to 48 hours we find it difficult for the yen to rally from here," said Adam Myers, currency strategist at UBS. "Investors will continue to fund out of the Japanese currency and that will remain in place until we see more concerted rhetoric which suggest (yen buying) intervention is on the way."