Forex
Yen Strengthens as Soft US PPI Spurs Fed Rate Hike Delay
The Japanese Yen has strengthened against the US Dollar as softer US inflation reports and fears of currency intervention weigh on the US Dollar (USD). The USD/JPY pair lost traction to near 159.45 during Asian trading hours on Friday.
The Bureau of Labor Statistics revealed that the US Producer Price Index (PPI) was unchanged in July, below market expectations of a 0.2% gain. This cooling of inflation has bolstered market expectations that the US Federal Reserve (Fed) could keep interest rates unchanged next month.
Market expectations have shifted in recent days, with traders now pricing in a rate hike in October or December after initially expecting a move at the September policy meeting.