Yen Declines As Inflation Worries Recede

(RTTNews) - The Japanese yen declined against its major counterparts in the European session on Friday, as soft U.S. inflation data strengthened hopes that the Federal Reserve's monetary policy tightening program is nearing an end.

U.S. consumer and producer prices cooled more than expected in June and the markets now expect only one more rate hike from the Fed later this month.

Investor sentiment improved on hopes that the Fed would end its rate hike campaign soon.

U.S. export and import prices and the University of Michigan's preliminary reading on consumer sentiment are due later in the day.

Focus will shift to earnings, with financial giants Citigroup, JPMorgan Chase and Wells Fargo due to release their quarterly results before the start of trading.

The yen fell to 155.71 against the euro, 88.28 against the kiwi and 94.86 against the aussie, setting 4-day lows. The yen is seen finding support around 158.00 against the euro, 90.00 against the kiwi and 98.00 against the aussie.

The yen was down against the franc, at a record low of 161.63.

Against the pound, the yen touched a 3-day low of 181.91. The next possible support for the currency is seen around the 186.00 level.

The yen edged down to 138.73 against the greenback, reversing from an early near 2-month high of 137.23. The currency may locate support around the 142.00 level.

The yen weakened to a 2-day low of 105.71 against the loonie, from an early multi-week high of 104.71. If the currency falls further, 108.00 is likely seen as its next support level.

Looking ahead, Canada manufacturing sales data for May, U.S. export and import prices data for June, U.S. University of Michigan's preliminary consumer sentiment for July and U.S. Baker Hughes oil rig count data are slated for release in the New York session.