The yen was poised for its strongest week in nearly three months on Friday as traders unwound their long-held bets against the frail currency ahead of crucial U.S. inflation data that could cement rate cut expectations.
The yen was poised for its strongest week in nearly three months on Friday as traders unwound their long-held bets against the frail currency ahead of crucial U.S. inflation data that could cement rate cut expectations.
The yen has dominated the currency markets this month, surging to a near three-month high of 151.945 per dollar on Thursday after starting the month languishing at 38-year lows of 161.96 per dollar.
The large move follows suspected interventions from Tokyo in early July that wrong-footed traders and led to unwinding of profitable carry trades, in which traders borrow the yen at low rates to invest in dollar-priced assets for higher returns.
On Friday, the yen was last at 153.625, set for a 2.3% rise for the week, its biggest weekly gain since late April-early May as a global stocks rout also drove investors towards safe assets, including yen.
"I think the speed of the yen rally means we are probably due some consolidation pretty soon," said James Athey, fixed income portfolio manager at Marlborough Investment Management.
