US Dollar Falls Against Yen as Inflation Data Shifts Rate Hike Bets

The US dollar fell against the Japanese yen on Wednesday after the release of softer-than-expected inflation data from the United States.

The Personal Consumption Expenditures (PCE) Price Index showed that annual headline inflation remained unchanged at 3.4% in August, below the 3.7% expected by markets.

The core PCE Price Index, which excludes volatile food and energy components, also came in lower than forecast at 3%, below the 3.3% market expectation.

This has led to a shift in bets on a potential Federal Reserve rate hike, with investors now assigning around a 35% chance of a move in October, down from nearly 51% a day earlier.