Yen Slips Amid Calmer Trading; British Unemployment Rate Drops

The yen fell for the second day as traders awaited U.S. inflation data. Conversely, the British pound rose following a surprising drop in unemployment. The dollar increased against the yen, suggesting stabilization. Japan's interest rate changes and U.S. labor market data have significantly influenced recent currency movements.

The yen experienced a second consecutive day of decline on Tuesday, coinciding with a period of subdued trading ahead of the release of U.S. inflation data. Meanwhile, the British pound strengthened in response to an unexpected decrease in the UK's unemployment rate for June.

Markets have been significantly affected by a sharp appreciation in the yen since July, tied to reversals in the carry trade strategy and declines in stock markets. The U.S. dollar rose by 0.1% against the yen, reaching 147.34, indicating that the worst of market turbulence may be over.

The carry trade experienced a downturn as the yen fell to 38-year lows in July, spurred by low-interest borrowing in Japan. However, factors such as a surprise rate hike by the Bank of Japan and prospects of U.S. rate cuts have caused a rebound, pushing the yen up by around 8% since mid-July. Investors now await further inflation data to gauge future Federal Reserve policies.

(With inputs from agencies.)