The yen and the dollar fell on Monday, hitting seven-month lows against the Australian dollar as investor confidence about the global economy encouraged buying of commodities and riskier currencies. With Tokyo markets shut until Thursday for the Golden Week holiday and London on a one-day holiday, trading was lighter than normal but did not stop sterling and the New Zealand dollar from pushing to their highest in two weeks against the yen. Analysts said the gain in riskier currencies was driven by a confluence of improving U.S. economic indicators, signs that the new flu strain outbreak appeared less severe than feared and rising stock markets. The S&P futures rose 0.5 percent, indicating an upbeat start on Wall Street later. Reports on Friday showed U.S. consumers felt more confident about the economy in April while a key gauge of manufacturing suggested the sector was gradually emerging out of a deep slump. "All these factors are helping risk appetite. The dollar and yen seem to be coming under some pressure and equities are firming," said Mitul Kotecha, global head of foreign exchange strategy at Calyon in Hong Kong. The U.S. dollar gained 0.2 percent to 99.37 yen from late U.S. trading levels, edging closer to the 100 yen level which it broke in early April to set a six-month high of 101.45 yen. But it failed to sustain the April move for long. "There's a view there's a lot of stop losses above there (100.00) and if we see dollar/yen 100 being broken then you could see a swift move higher to recent highs," Kotecha said. The Aussie jumped to $0.7390, its highest in seven months, and struck 73.54 yen, its strongest showing since mid-October. Traders and analysts say the yen is once again being used as a funding currency for investors to ride rising trends in other currencies and take positions in commodity currencies expected to benefit as the outlook for the global economy improves. The euro rose 0.5 percent to $1.3335 and 0.8 percent to 132.63 yen, although analysts said the market was wary ahead of a European Central Bank meeting on Thursday. Some believe policy-makers might follow the U.S. Federal Reserve's lead and deploy unconventional emergency measures such as direct asset purchases, to stimulate growth. "This week the ECB is poised to cut rates 25 basis points to 1 percent, where it will stay for some time," said Sue Trinh, senior currency strategist at RBC Capital. Investors will also wait for the findings of the U.S. banks' stress tests this week while the U.S. employment picture will become clearer on Friday. Analysts expect another 630,000 jobs were lost last month, modestly less than recent readings. Analysts warned these were all events which held risks, but Greg Gibbs, currency strategist at the Royal Bank of Scotland, said investor confidence appeared to have gained positive momentum. "Credit default swap, emerging market credit and implied volatility indices have fallen to their lowest levels since October. This resiliency in investor confidence suggests the Aussie and the kiwi will rally further in the week or so," Gibbs said.

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