Yen Bounces Back Above 159 as Oil Prices Fall and Diplomacy Eases Pressure

The Japanese yen strengthened on Wednesday, ending a two-day decline as falling oil prices eased inflation concerns and renewed diplomatic efforts in the Middle East reduced pressure on energy markets.

The yen gained support from a softer US dollar ahead of key inflation data and a speech by Federal Reserve Chair Kevin Warsh later this week.

Markets remain divided between expectations for Fed rate cuts and speculation about further Bank of Japan tightening, with Japan's July Corporate Services Price Index due out today offering fresh clues on the BOJ's policy outlook.