Yen Stabilizes Amid Rate Hike Speculation and Middle East Tensions

The Japanese Yen has stabilized around 159.05 against the US Dollar in early Asian trading on Friday, despite concerns over weak GDP data.

Japan's core Consumer Price Index (CPI) inflation rose to 1.8% year-over-year in July from 1.6% in June, according to data released by Japan Statistics Bureau.

The Bank of Japan is likely to raise its policy interest rate from 1.0% to 1.25% at its upcoming September meeting, with a probability of around 80%, according to Reuters overnight index swaps.

Market analysts believe that ongoing tensions in the Middle East could weigh on the JPY and create a tailwind for the pair, as Japan is heavily dependent on Middle East oil.