Yen Surges Amid Cooling Rate Hike Expectations

The yen has strengthened against the dollar as investors reassess their expectations for a Federal Reserve interest rate hike. The US central bank's next meeting is set to take place on September 16, and Fed funds futures now price an implied 69.9% probability that rates will remain unchanged.

This shift in market sentiment comes after recent soft US data, including non-farm payrolls and measures of consumer and producer price inflation, have doused expectations of rate hikes this year.

The US dollar index has fallen to its lowest levels of the month at 99.501, while the yen has gained momentum against the dollar, rising 0.2% to 159.075 yen.