SINGAPORE, July 31 Reuters The yen softened on Monday, extending losses from a volatile session at the end of last week after the Bank of Japan BOJ loosened its grip on interest rates, but it remained on track for its first monthly gain against the dollar since March.

There is plenty on the agenda in the coming week, with euro zone inflation and GDP data due later on Monday, the Bank of England meeting on Thursday, and U.S. payrolls on Friday, the first of several data points that will shape the Federal Reserve39;s September interest rate decision.

The dollar rose to 142.22 yen its highest in three weeks in early European trading on Monday, and was last up 0.7 at 142.1.

The Japanese currency went into a tailspin on Friday as traders tried to determine the implications of the BOJ39;s move to maintain ultralow rates while making its bond yield curve control YCC policy more flexible and loosening its defence of a longterm rate cap.

The dollar eventually ended the Friday session with a 1.2 gain against the yen, though that was after it had slid 1 to a sessionlow of 138.05 yen.

Japan39;s benchmark 10year government bond yield surged to a nineyear high on Monday, spurring the central bank to conduct additional purchase operations to slow its rise, weighing on the currency.

The decision by the BoJ to step back in soon … has likely surprised some market participants and encouraged yen selling overnight, said MUFG analysts in a Monday note.

At the same time, the yens…