Japanese Yen Edges Higher on Hawkish BoJ Expectations

The Japanese Yen edged higher against the US Dollar on Friday as data reaffirmed expectations of a rate hike from the Bank of Japan. The US Producer Price Index (PPI) rose to 5.4% year-over-year in August, beating consensus estimates and prompting traders to add bets for a Federal Reserve rate hike next week.

The USD/JPY pair struggled to capitalize on its previous day's recovery momentum and traded below the mid-154.00s. However, hawkish BoJ expectations and sticky inflation might hold back JPY bears from placing aggressive bets, capping the USD/JPY pair.

Traders are now looking to the US Consumer Price Index (CPI) report for short-term opportunities heading into the weekend. The data will provide cues about the US Federal Reserve's future policy path and drive the US Dollar.