Yen Strengthens as US Inflation Data Eases Rate Hike Expectations
The yen opened in Tokyo's foreign exchange trading on August 13th at the lower end of its 159 range against the dollar. By 9:00 a.m., it was trading at 159.32-34 per dollar, up 5 sen from the previous day.
This strengthening is attributed to the July US Consumer Price Index (CPI) data released on August 12th, which showed a slowdown in line with market expectations. The CPI rose 3.4% year-on-year, decelerating from June's 3.5% increase and matching market forecasts.
The core index, excluding food and energy, also rose to 2.5%, within the range of market expectations. This easing of excessive concerns about a resurgence in US inflation has reduced expectations that the Federal Reserve (FRB) would proceed with a rate hike at the next Federal Open Market Committee (FOMC) meeting in September.