Yen Edges Up as Traders Reconsider Fed Rate Hike Bets

The yen has gained strength against the dollar, shrugging off weaker-than-expected Japanese GDP data. Traders are reining in expectations of a Federal Reserve rate hike this year.

Data released on Monday showed Japan's GDP expanded at an annualised 1.1% in the second quarter. Capital Economics analysts noted that the details were mixed, with decent economic growth and limited pass-through from higher energy prices.

The euro, British pound, Australian dollar, and New Zealand dollar are also gaining strength against the US dollar. The Federal Reserve's next meeting is scheduled for September 16, and Fed funds futures price an implied 69.9% probability that policymakers will hold interest rates at that time.