Yen edges up as traders push back Fed rate hike bets

According to Business Recorder, the yen strengthened slightly against the dollar on Monday, trading at 159.055 per dollar after a 0.2 per cent gain. The move came despite a softer-than-expected reading on Japan's second-quarter gross domestic product, which grew at an annualised pace of 1.1 per cent. Currency traders have instead pared back expectations that the US Federal Reserve will raise interest rates this year.

Capital Economics called the GDP figures mixed, noting that a jump in government consumption pointed to early effects of expansionary fiscal policy. Softer US data, including payrolls and inflation readings, has reduced bets on Fed tightening this year, and futures now imply a 66.9 per cent chance that rates stay unchanged at the September 16 meeting, up from 47.6 per cent a month ago. Investors expect few signals from the Fed before the Jackson Hole symposium, scheduled for August 27 to 29.

The dollar index slipped 0.1 per cent to 99.519, near the lowest point seen this month, while sterling rose 0.1 per cent to $1.3546 and the euro stayed flat at $1.1573. Brent crude fell 0.1 per cent to $88.48 a barrel as oil prices moved both up and down, with talks between the US and Iran still stalled. Bitcoin and ether each dropped 0.3 per cent, to $62,854.48 and $1,874.80 respectively.