After rebounding over the weekend, the U.S. dollar took a step backwards against most of its major counterparts Monday with traders factoring in the probability that the Federal Reserve will raise interest rates next month. Emerging-market stocks extended Friday’s rebound from a two-month low while the gains in the yen put pressure on Japanese shares.

The yen was up from its month’s low, prompted by a U.S. refutation of Japan’s case for intervention to weaken the exchange rate and a report of its biggest trade surplus in six years. Japan and the U.S. were at loggerheads over the weekend when financial policy makers and government officials met at the G7 meeting in Sendai. The U.S. is against continued Japanese interference in the status of the yen.

Rate Hike Still Up in the Air

The minutes of the Fed’s April policy meeting released on Sunday signaled a strong possibility of a June rate even as China’s uncertain growth picture and the U.K.’s June Brexit referendum on European Union membership may weigh heavily on the central bank to refrain from interest tightening at this time.

Regional Fed representatives from San Francisco St. Louis and Philadelphia are due to speak Monday and their comments are certain to clarify the possibility for a rate hike in June. Analysts say the odds of such a hike shot up seven-fold to 28 percent over the last five trading days.

According to John Teja, a director at PT Ciptadana Securities in Jakarta, “The risk for Federal Reserves to raise its rate in June is still there. I would recommend investors to stay defensive although they can start buying good quality companies that have been depressed in the recent sell-off.”

The Bloomberg Dollar Spot Index, a gauge of the greenback against 10 major peers, fell 0.1 percent as of 7:05 a.m. in London, after rallying 0.8 percent last week .The yen climbed 0.3 percent to 109.83 per dollar and the euro traded at $1.1228, little changed from Friday.