FX.co ★ Japanese Yen Rises on Dollar Weakness

The Japanese yen appreciated to approximately 146.8 against the US dollar on Monday, recovering from its previous session's losses. This rebound occurred as the US dollar remained under pressure, influenced by expectations of potential Federal Reserve interest rate cuts. Market participants are now focusing on a series of upcoming US labor market reports anticipated this week, which may influence the Federal Reserve's decisions moving forward. In Japan, recent data revealed that capital expenditures increased by 7.6% in the second quarter of 2025, up from 6.4% in the previous quarter and exceeding predictions of a 6.2% rise. On another note, the manufacturing PMI for August was adjusted downwards to 49.7 from an earlier estimate of 49.9, indicating the 13th contraction in factory activity over the last 14 months. Investors continue to anticipate that the Bank of Japan might raise interest rates by the end of the year, driven by factors such as rising wages, ongoing inflation, and an increasingly positive economic outlook.