Yen Surges on Strong Inflation, Eyes on Warsh's Jackson Hole Speech

The Japanese Yen (JPY) gained strength against the US Dollar in early Asian trading on Friday, with the pair easing to around 159.54 as expectations of a Bank of Japan rate hike by its September 17-18 policy meeting increased.

Tokyo's headline Consumer Price Index (CPI) rose to 1.9% year-over-year in August from 1.8% in July, while core CPI accelerated to 1.8%, exceeding the market forecast of 1.7%. The inflation excluding food and energy climbed to 2.0%, highlighting persistent price pressures.

The stronger-than-expected inflation readings provided fresh support to the Yen, weighing on USD/JPY. Investors now await Fed Chair Kevin Warsh's Jackson Hole speech for clues on the US interest-rate outlook, with any hawkish remarks potentially limiting the Dollar's losses and the Yen's advance.