SINGAPORE: The yen held steady ‍in early Asian trading after a powerful 7.5-magnitude earthquake struck Japan's northeast overnight, adding to a risk-off ​mood ahead of several policy decisions from central banks including the Federal Reserve.

Against the yen, the U.S. dollar was last flat at 155.885 ⁠yen after the quake, which prompted evacuation orders and tsunami warnings that were downgraded to advisories hours later.

"The initial shock immediately revived ⁠memories of supply-chain ‌fragility, potential insurance losses, and disruption to critical industrial output," said Tony Sycamore, market analyst at IG in Sydney, noting the anxiety was adding to the "risk-off tone" on markets.

The Australian dollar was last flat ⁠at $0.6626 ahead of the Reserve Bank of Australia's December policy decision due at 0330 GMT, when it is widely expected to keep interest rates on hold.

Markets are preparing for a busy week of central bank decisions, anticipating a rate cut from the Federal Reserve at its meeting later this week.

The U.S. dollar index, which measures the greenback's strength ⁠against a basket of six currencies, ​was last up 0.1% at 99.092, edging back from its highest level in a week.

Bond investors are dialling back expectations of rate cuts in 2026 ‍as scepticism mounts that Kevin Hassett, the frontrunner to succeed Jerome Powell, whose eight-year term as Fed chair ends in May, will prove as dovish ​as hoped by U.S. President Donald Trump.

Nevertheless, markets believe policy easing from the U.S. central bank this week is a near-certainty, with attention turning to the outlook for the year ahead.

Fed funds futures are pricing an implied 87% probability of a 25-basis-point cut at the Fed's December 9-10 policy meeting, according to the CME Group's FedWatch tool.

The yield on the U.S. 10-year Treasury bond was last trading at 4.168%, down 0.4 basis point from late U.S. levels, to retrace a three-day rise in yields.

"Markets made a dash for higher rates, and the new levels seem justified based on fundamentals," analysts from ING wrote in a research note.

The euro stabilised following a selloff in bund markets on Monday, after ECB board member Isabel Schnabel ⁠told Bloomberg News that the European Central Bank's next move may be an ‌interest rate hike, rather than a cut as some expect, but added that it will not happen in the near future.

The European common currency was last trading flat at $1.164075.

Against the Chinese yuan trading offshore in Hong Kong , the ‌U.S. dollar was ⁠last flat at 7.07 yuan.

The British pound was last steady at $1.332, while the New Zealand dollar was also unchanged at $0.57755.

Bitcoin and ⁠ether= were last down 0.8% apiece.

(Reporting by Gregor Stuart Hunter. Editing by Sonali Desai)