LONDON/ SINGAPORE (Reuters) -The euro fell sharply on Monday, hit by political uncertainty after gains by the far-right in voting for the European Parliament on Sunday prompted a bruised French President Emmanuel Macron to call a snap national election.

The uncertainty in France adds one more element to what will be a busy week for markets with crucial U.S. inflation data due on Wednesday, the same day as a Federal Reserve policy meeting, and then the Bank of Japan rounding off the week.

The euro hit a one-month low against the dollar of $1.0748, and was last 0.35% weaker at $1.0764.

The common currency's decline was across the board, it dropped 0.33% on sterling and touched a new near two-year low of 84.51 pence, and was last down 0.22% on the Swiss franc, and hit a seven-week low of 0.9639 francs.

"The election results over the weekend from the EU largely showed a pick up in support for the right wing parties, generally what was expected, but the surprise element is that Macron has reacted by calling a snap election, so that makes the market more nervous," said Lee Hardman, senior currency analyst at MUFG.

"That's reinforced the sell off in the euro that we saw at the end of last week, and the other factor on top of that is the U.S. payrolls report was very strong, which increases the risk of a hawkish Fed policy signal when they meet on Wednesday."

The Federal Reserve will conclude its two-day policy meeting on Wednesday. Data on Friday showed non-farm payrolls increased by 272,000 jobs last month, well above expectations in a Reuters poll for 185,000.

Markets are now pricing in 36 basis points of Fed cuts this year compared to nearly 50 bps - or at least two cuts - before the jobs data.

U.S. consumer inflation data will be another factor in the Fed's decision making. While no policy shift is expected at the meeting, the Fed will issue the latest batch of 'dot plots' policy makers' projections of the path of interest rates.

At the last such release in March, the median projection was for three 25-basis-point rate cuts this year. Investors will be watching to see by how much that is revised down.

The paring back of expectations for rate cuts has been supporting the dollar for much of 2024, with the Japanese yen suffering particularly.

The dollar was last up 0.15% on the Japanese currency at 157 yen, having jumped 0.7% on Friday after the payrolls print. With sterling steady at $1.2722, the dollar index - which tracks the unit against six main peers - was up 0.08% at 105.15. It touched a one-month top of 105.3 in early trading.

Japan will also be in focus this week, as the Bank of Japan is due to hold its two-day monetary policy meeting on Thursday and Friday, with the central bank widely expected to maintain short-term interest rates in a 0-0.1% range.

Reuters reported last week that BOJ policymakers are brainstorming ways to slow its bond buying and may offer fresh guidance.

Speculation is building in the market that the BOJ may tweak its bond buying arrangements, and if the central bank fails to meet these bets, the yen could come under further pressure.

"Without any hawkish surprise, JPY may be sold initially following the policy announcement, similar to what we have seen after the past meetings," analysts at Nomura said in a note.

"Moreover, in the case of dovish surprises, for example, if the BOJ avoids decreasing its JGB purchases or decreases its (Japanese government bond) purchases only very slightly, there is a risk that USD/JPY could overshoot to possible intervention territory again, like we saw in April."

Japanese officials spent around 9.8 trillion yen ($62.46 billion) on currency intervention to support the currency in April and May.

($1 = 156.9 yen)

(Reporting by Ankur Banerjee in SingaporeEditing by Shri Navaratnam, Neil Fullick and Emelia Sithole-Matarise)