Ella 
The Japanese yen (JPY) rose against the U.S. dollar (USD) on Thursday. Japan’s second-quarter gross domestic product (GDP) growth exceeded expectations, supporting the argument that the Bank of Japan (BoJ) may raise interest rates in the near future, and the yen rose against the dollar.
Japanese Economic Minister Yoshitaka Shindo said that as wages and incomes increase, the economy is expected to gradually recover. Shindo also added that the government will work closely with the Bank of Japan to implement flexible macroeconomic policies.
However, USD/JPY has been supported by a stronger U.S. dollar amid rising government bond yields. However, the potential for further gains in USD/JPY may be limited as expectations grow for a rate cut of at least 25 basis points by the U.S. Federal Reserve in September.
Dovish U.S. consumer price index (CPI) data fueled debate over the extent of the Federal Reserve’s potential rate cut in September. Traders are leaning toward a milder 25 basis point cut, with a 60% chance, while a 50 basis point cut remains a possibility. The chance of a larger rate cut in September is 36%, according to CME FedWatch data.
