Yen rises near 159 per dollar as US dollar weakens

The Japanese yen climbed to around 159 per dollar on Monday, recovering some of last week’s losses as the dollar weakened following softer US economic data that eased concerns about an imminent Federal Reserve rate hike.

Markets now see roughly a 67% probability that the Fed will hold rates in September, up from below 50% a month ago.

The yen also advanced despite preliminary data showing Japan’s economy grew less than expected in the second quarter, as weak domestic demand outweighed robust exports.

The economy expanded at an annualized 1.1% in Q2, below market expectations of 2%.

Meanwhile, traders remain alert for further currency intervention by authorities amid persistent yen weakness.

Markets are also speculating about a possible Bank of Japan rate hike in September or October, amid concerns that a weaker yen could fuel inflation.