Major currencies were rangebound as a public holiday in the US, UK, Germany, Switzerland and other European financial markets left volumes and volatility low. The yen came off last week's lows on the back of some comments from policy makers which reminded markets that interest rates are likely to rise in the future. Finance Minister Koji Omi earlier today said Japan must be ready for higher interest rates when it considers fiscal reform plans, while Bank of Japan governor Toshihiko Fukui on Friday warned of the negative effects on Japanese consumers of a persistently low-interest rate economy. "Dealers in Tokyo already eye another interest rate hike sometime in the third quarter of this year," said Haruya Ida at IFR Markets. "If the economic and price data do not signal a cut, the BoJ could justify a move then on FX levels or land prices," he added. Overall, however, currency movements have been limited by a lack of trading volume, with investors likely to focus on the upcoming week, which will be rich in potentially market-moving data. In the US, the May payrolls data on Friday will dominate, with analysts expecting an improvement to 140,000 new jobs from 88,000 in the previous month. Also in focus will be the second estimate for first quarter GDP on Thursday as well as the ISM indicator on Friday. Financial markets are scrutinizing US data for any hints as to the next direction for interest rates. Mixed jobs and housing data in recent months have pushed investors to consider the likelihood of rate cuts later this year, so any further weakness could weigh on the dollar's performance. In Europe, eyes will turn to the inflation data on Thursday, with the annual rate expected to remain at 1.9 pct in May, while manufacturing PMI on Friday may also be a driver for financial markets. Unlike the US, strength in euro zone data is being taken for granted, as the market has been buying euros in anticipation of at least another two interest rate hikes this year. The pound has similarly remained firm on views that rates will rise again as well as on carry trades, with investors buying UK assets -- while borrowing in Japan or Switzerland -- for their promise of higher yields. "However, with inflation indicators in many countries on the rise and resource inflation running high, the carry trade is now entering risky territory," said BNP Paribas strategists. Further interest rate rises in global financial markets and high valuations in equity markets are creating more risk for such trades, leaving markets in a balance.