Japanese Yen Gains as Soft US Data Pushes USD/JPY Toward 159

The Japanese Yen strengthened against the US Dollar on Monday as traders reduced expectations for another Federal Reserve rate increase. USD/JPY fell for a second session and traded near 159.10 during Asian hours.

Japan's weaker second-quarter growth figures failed to reverse the currency's advance. Softer US retail sales and inflation data placed greater pressure on the dollar.

The yen's gain was not without its caveats, however. OCBC analysts Sim Moh Siong and Christopher Wong expect intervention concerns to limit further gains in USD/JPY near 160. Japanese officials have monitored the yen's weakness closely, with some speculating that a lasting recovery may require a clearer BoJ commitment to faster rate normalization.