Ella 
The Japanese yen (JPY) extended its rise against the U.S. dollar (USD) for the fourth straight session, hovering near Thursday’s 12-week high of 152.22. The yen’s strength could be due to traders unwinding carry trades ahead of the Bank of Japan’s policy meeting next week.
The Bank of Japan is expected to raise interest rates at its meeting next week, which would lead short sellers to unwind their positions and boost the yen. In addition, the Bank of Japan is widely expected to outline plans to scale back its bond purchases to reduce its massive monetary stimulus.
The USD/JPY exchange rate fell to a more than two-month low on Wednesday as Japan’s Finance Minister Shunichi Suzuki and top foreign exchange diplomat Masato Kanda avoided commenting on foreign exchange issues, according to Reuters.
The dollar could strengthen after recent U.S. PMI data showed that private sector activity expanded at an accelerated pace in July, highlighting the resilience of U.S. economic growth despite rising interest rates. The data gives the Federal Reserve more wiggle room to maintain its restrictive policy stance if inflation does not show signs of easing.
Investors are expected to closely watch the U.S. gross domestic product (GDP) annualized (Q2) data due on Thursday, as well as personal consumption expenditures (PCE) inflation data due on Friday. The reports are expected to provide fresh insights into the state of the U.S. economy.
