Yen Surges as U.S. Inflation Data Looms: A Week of Wins

The Japanese yen experienced its strongest week in nearly three months due to traders unwinding long-held bets against the currency ahead of key U.S. inflation data. The yen surged to a near three-month high driven by suspected interventions and a global stocks rout, prompting investors to seek safer assets.

The Japanese yen is set to conclude its most robust week in nearly three months as traders reversed their long-standing positions against the struggling currency. This shift comes in anticipation of critical U.S. inflation data that could solidify expectations for rate cuts.

This month, the yen has dominated currency markets, reaching a near three-month high of 151.945 per dollar on Thursday. The large moves are attributed to presumed interventions from Tokyo in early July, which caught traders off guard and led to the unwinding of lucrative carry trades.

As of Friday, the yen stood at 153.625, marking a 2.3% rise for the week. This makes it the yen's most significant weekly gain since late April-early May. The retreat in global stocks pushed investors towards safer assets, including the yen. Analysts expect some consolidation after the rapid appreciation, speculating that the yen still has potential for further gains given expectations of U.S. rate cuts.

(With inputs from agencies.)