Yen Holds Steady as BoJ Rate Hike Speculation Grows

The Japanese Yen has remained stable in early Asian trading on Friday at around 159.05 against the US Dollar, despite weaker-than-expected Gross Domestic Product data.

However, growing speculation that the Bank of Japan could raise interest rates next month has offset this weakness.

Data released by the Japanese Statistics Bureau showed a 0.4 percentage point rise in National Consumer Price Index (CPI) inflation to 2.0% year-over-year in July from 1.6% in June.

Masato Koike, senior economist at Sompo Institute Plus, expects the Bank of Japan to raise interest rates in September due to renewed tensions in the Middle East pushing up crude oil prices and adding to price pressures from a weak yen.