NEW YORK (CNN/Money) - The dollar declined significantly against the yen Monday, falling to a new one-month low at one point during the day, as traders bought the Japanese currency on signs that the world's No. 2 economy may be emerging from its prolonged slump.

At around 4:00 p.m. ET, the dollar bought ¥117.45. The dollar fell to ¥117.25, its lowest versus the yen since July 15, earlier in the day.

In recent sessions, the yen has gained as global investors have funneled money into Japan's Nikkei share index, which last week soared to a one-year high. Additionally, data showing that Japan's trade surplus rose a hefty 7.3 percent in July from the same month last year, reinforced the view that recovering U.S. consumer demand has helped Japan's exporters.

"Good economic prospects are more evident in the United States, but I think demand for the yen is strong because bullish Japanese data is more of a surprise since the image of Japan's deflation has been strong," Kosuke Hanao, head of foreign exchange sales at Royal Bank of Scotland, told Reuters.

Meanwhile, the euro rose to $1.092 in early trading, nearly a cent above four-month lows set Friday, but then slipped to $1.0872 around 4:00 p.m. ET. Trading in the European currency remained thin with the markets in London closed for a holiday.

"After the euro selloff we experienced last week, we have entered a calmer period, particularly with the United Kingdom off the radar screens today," said Peter Wuyts, market analyst at KBC in Brussels, Belgium.

Treasurys fell prey to a still-robust housing market on Monday, with prices slipping and yields climbing closer to one-year highs as investors learned that home sales had jumped to a record high in July.

At around 4:00 p.m. ET, the 10-year note fell 16/32 of a point in price to 97-22/32 to yield 4.54 percent versus 4.47 percent late Sunday. The 30-year bond fell 25/32 of a point in price to 100-27/32, sending its up yield to 5.32 percent from 5.2 percent late Sunday.

The two-year note dipped 3/32 of a point in price to 99-3/32 to yield 1.98 percent, while the five-year note slipped 9/32 of a point in price to 98-24/32 with a yield of 3.52 percent.

"Housing seems to be strong but people are buying houses in anticipation of much higher mortgage rates," Frank Hsu, the director of global fixed income at Fimat, told Reuters.

A report from the National Association of Realtors (NAR) showed homes sold at an annual rate of 6.12 million in the month, up 5 percent from June's pace of 5.83 million.

The figures reaffirmed expectations for a strong economic recovery, though last month may have marked a peak for the red-hot housing market as Americans rushed to buy before interest rates became too high.  

-- from staff and wire reports