Yen Edges Up on Reduced Fed Rate Hike Bets, Currencies Muted

The Japanese yen has continued its upward trend against the US dollar, despite weaker-than-expected GDP data. The currency was up 0.2% at 159.055 yen on Monday, with traders attributing the move to a decrease in expectations of a Federal Reserve rate hike this year.

Data released on Monday showed Japan's GDP expanding at an annualized 1.1% in the second quarter, but analysts noted that the details were mixed. Government consumption was up, suggesting that Prime Minister Takaichi's expansionary fiscal policies are having an impact.

The euro and British pound remained relatively unchanged, while the Australian dollar and kiwi currency held steady against the US dollar. The back end of the Treasury curve remains elevated, with some analysts attributing higher yields to credibility concerns.