Dollar Holds Firm Ahead of BoJ Rate Decision

The US dollar remained relatively stable against the yen on Friday, trading in the low 159.00s and around 159.02.

In Japan, July inflation rose to 1.9% year-on-year, while August business surveys beat expectations.

This has led to an increase in rate hike bets for the Bank of Japan's September meeting, with swaps implying a roughly 80% chance of a rate hike.

Meanwhile, US data showed private-sector activity strengthening, with the Composite PMI index rising to 56 from 54.5 on a stronger Services reading.

The dollar was supported by this backdrop and despite a weekly decline, while Washington's shift towards sanctions on Iran improved risk appetite.