TOKYO : The yen picked up Monday as worries about China overshadowed currency markets before US data this week which may give clues about the timing of an interest rate rise this year.

Japan's currency is the best-performing major unit this quarter, as a wave of global volatility driven by fears about a slowdown in China push investors into currencies seen as safe havens during times of turmoil or uncertainty.

"The yen's already quite undervalued against the dollar," said James Kwok, head of currencies at Amundi Asset Management.

"The (Bank of Japan) is approaching the limit in doing quantitative easing and so is expected to reserve its powder for a more serious market rout in the future."

More easing would tend to weaken the yen.

"This is a period where uncertainty dominates the foreign-exchange market," Osamu Takashima, a Tokyo-based strategist at Citigroup, told Bloomberg News.

In the United States, Fed boss Janet Yellen said last week she expected to raise near-zero rates before the year is out, giving a boost to the dollar. But it faced selling Monday as markets look to US jobs data later in the week.

"Dollar-selling sentiment emerged after the dollar climbed to 121 yen level following Yellen's remarks," said Minori Uchida, head of global markets research at Bank of Tokyo-Mitsubishi UFJ.

"But in general, trading is range-bound as players are more or less on the sidelines ahead of major events," said Uchida.

On Friday the Commerce Department said the US economy grew 3.9 percent in April-June, up from the 3.7 percent originally stated thanks to a boost in investment and consumer spending.

Attention will now turn to next Friday's non-farm payrolls results, with a strong figure likely to reinforce calls for an early rate move.

In afternoon Tokyo trading, the greenback traded at 120.26 yen, down from 120.49 yen on Friday in New York.

The euro weakened to $1.1179 and 134.41 yen against $1.1202 and 134.97 yen in US trade.

Also this week, the Bank of Japan releases its Tankan survey of business confidence, with analysts forecasting a dip in reaction to China's growth slowdown which has rattled global markets.

In other forex trading, the dollar rose 0.10 percent against the Taiwan dollar, 0.9 percent against the Thai baht and 0.8 percent against the Philippine peso. It was up 0.44 percent against the Korean won.